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Typically in terms of documents we’d like to see you bring when you meet with a franchise lawyer, assuming you have what we call a category one or category two claims, again, category one meaning the opportunity was oversold; can I get my money back, or, secondly, there is something about this ongoing relationship that needs to be addressed and fixed. We like to see, number one, the terms of the written agreement you have in place. If you’re a car dealer, we like to see the dealer agreement. If you’re a quick service restaurant franchisee, we like to see the franchise agreement.
And in franchise situations, we also like to see, secondly, a franchise disclosure document because there are certain categories of disclosures that have to be spelled out in that document, like a prospectus if you’re buying a stock that we’re interested in seeing what the franchisor had to say. And then thirdly on the category one side, is there anything in writing that you were given with respect to revenues, expenses, cash flows or the number of stores that were gonna be opening, and that type of things; things that were material to you that got you to enter into the relationship that turned out to not be true.
Then the last thing I would say in terms of – maybe a fourth thing would be always ask what’s your objective, and then the follow-up question would be bring in any documents you might have, email exchanges, for example, with respect to what your franchisor sent or maybe your lawyer has sent on your behalf about what you’ve done to try and affect the business resolution that you’re looking for so we can kind of have a sense of as we think about what’s the best going forward strategy, and what have you tried already. So with that, those kind of four categories of information, we have a good handle on whether we can tell the client with some reasonable degree of certainty that we expect we could be helpful.
We like to say to prospective clients also, skip law school. If you want to know something is unlawful, ask yourself, “Is it unfair?” And we’ve made our living here where people seem to say franchisor types, look, read the fine print here. It says we can do anything we want to whenever we want. Well, that may be what the writing says, but there are other principles that can come into play to trump that writing, like a state franchise statute or common law principles or fraud or the common law principle of good faith and fair dealing. So if we can prove unfair treatment, and particularly if we have some statutes or common law principles that are likely to be able to be successfully evoked, we have an outstanding chance to be successful.
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Minneapolis franchisee lawyer Michael Dady explains what documents a franchisee should bring to an initial meeting with an attorney.