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Resolving franchise disputes

Updated: May 16, 2023

The best way to resolve any franchise dispute is to deal with it personally, in a non-confrontational manner. It is essential to have a clear objective and a plan for achieving it. This will involve identifying the strengths and weaknesses of one’s position; anticipating how the other party will react and if they have any areas of vulnerability that can be exploited in negotiations  When planning, because emotions can cloud sound judgement, it is sensible to seek an unbiased view by a third party who is not personally involved. The usual choice for this sort of advice would be a solicitor but the problem with that is that a lawyer’s job is to represent their client rather than provide advice to enable the client to represent themselves. Inevitably, as soon as the opposing party receives a solicitor’s letter they will seek legal advice and the possibility of achieving the best outcome is greatly reduced. Costs will also start to mount.  Case law involving franchising is littered with examples of litigation, sometimes initiated by the franchisor sometimes by a franchisee, has escalated out of control and ended up being vastly more costly and damaging than it needed to be. Franchisees have been made bankrupt and entire franchise networks have collapsed because of unnecessary litigation. Containment is key to the best resolution and if presented correctly, as part of a well planned strategy, is a powerful  bargaining tool. A franchisor will not want to open up a hornets nest of trouble and will welcome any opportunity to contain a dispute. A franchisee, presumably with less financial resources, should see the benefits of containing the dispute and keeping it out of the courts.  As stated previously, for the aggrieved party, be they a franchisee or a franchisor, the key strategy is to gather facts that will support their case and plan how to use them to convince the opposing party that it will be in their best interests to concede. This process is much easier to describe in a blog than it is to implement. For this reason the use of specialist advice is eminently sensible 

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