FRANCHISING & DISTRIBUTION
Nixon Peabody has decades of domestic and international experience helping franchisors grow and protect their businesses. Our top priority is providing top value and client satisfaction. U.S. News and World Report/Best Lawyers named Nixon Peabody as the 2011–2012 “Law Firm of the Year” in Franchise Law because we provide results and value like no other law firm. Clients choose us because of our unique focus, depth of experience, and excellent value. Our attorneys are recognized by Chambers, U.S. News/Best Lawyers, SuperLawyers, Franchise Times, and national and international bar associations as leaders in this field.
We work with franchisors and distribution companies in nearly every phase of the franchising process, from start-up and business concept refinement through business launch and international expansion. We have helped our clients achieve success in franchise growth, high stakes dispute resolution, and merger and acquisition activities, earning Nixon Peabody a global reputation for excellence.
Our attorneys counsel clients on whether to franchise, expansion strategies, and how to develop and protect their brands. We also counsel companies on licensing and distribution issues, including how to avoid being characterized as a “franchise.”
We have represented hundreds of franchise systems in more than 85 countries throughout the world. Attorneys in our Franchise & Distribution practice collaborate closely with the firm’s intellectual property, corporate, finance, securities, restructuring, and labor and employment lawyers, providing comprehensive, cost-effective solutions to our clients’ most complex and sensitive matters, which enables us to provide a full suite of services to our clients.
Our team offers strategic business counsel to companies in all stages of growth. Our services include:
- Structuring domestic and international franchise, licensing, and distribution programs
- Preparation of franchise agreements, development agreements, area representative agreements, brokerage agreements, leases, and other ancillary agreements
- Preparation of Franchise Disclosure Documents that comply with federal and state law requirements and promote franchise sales
- Advice on compliance with franchise sales laws, and preparation and filing of registrations and exemptions under state franchise sales laws and business opportunity laws
- Advice on structuring expansions to avoid application of state and federal franchise law
- Restructuring of existing franchise and distribution relationships
- Advice on franchise terminations and renewals
- Advice on cooperative purchasing and advertising programs
- Advice on mergers and acquisitions
- Advice and counseling on, and negotiation with, franchisee associations
In addition to helping our franchise clients grow their businesses, our attorneys have been involved in a large number of high-profile franchise distress and bankruptcy matters. We believe that the rewards go to the aggressor in the insolvency arena.
Our seasoned lawyers practice both domestically and internationally, and are skilled in mediation and arbitration, as well as litigation. We advise on disputes ranging from termination and restrictive covenant litigation to antitrust and “bet the company” cases. Our experience includes class action defense, fraud, RICO, trademark and copyright infringements, termination and non-renewal disputes, transfer and succession issues, enforcement of system standards, vicarious liability, insolvency, and securities fraud. Our lawyers have arbitrated cases in the U.S., Geneva, and Paris, dealing with domestic and international franchise, licensing, and distribution issues.
Leadership and community service
Our lawyers give back to the community as part of our commitment to doing what is best for our clients and the communities in which we live and work. We require each member of our Franchise & Distribution practice to teach continuing legal education and provide free legal services to nonprofits to allow franchise operation. The nonprofits then employ people in need and enable the funding of worthy causes. Our lawyers are named “SuperLawyers,” “Legal Eagles,” and “Best Lawyers” in recognition of our top-notch legal services and pro bono activities. This is also among the many reasons we earned the title of “Law Firm of the Year” in Franchise Law by U.S. News/Best Lawyers and received high rankings in Chambers USA: America’s Leading Lawyers for Business (2011), International Who’s Who of Business Lawyers, and Franchise Times.
Our lawyers are recognized leaders in the International Franchise Association, the American Bar Association Forum Committee on Franchising, the International Bar Association’s International Franchising Committee, and state franchise committees. The Wall Street Journal, Nation’s Restaurant News, Franchise Times, and other legal newspapers and magazines often quote our attorneys and seek their input on stories because they recognize the thought leadership of our practice.
- Represented Au Bon Pain in negotiation with a PE fund in its acquisition of foreign master franchisee
- Provided franchise law diligence and advice for the $36 million private equity investment of Falconhead Capital in Rita's Italian Ice and represented Rita’s from its founding until the second round of PE investment
- Represented Wyndham Hotel Group (then Cendant) in the acquisition of Ramada Hotel brand international franchise rights (about 250 hotels)
- Represented School of Rock in sale to a private equity group, and provided continued representation during its ownership by PE group; we also represented the same PE group on diligence related to a child care service franchisor
International Dispute Resolution Cases
- Represent the Republic of Turkey in defense of claim of misappropriation of real estate investment trust before the International Centre for Settlement of Investor Disputes venued in Paris.
- Represent an intellectual property licensor and lessor of robotics against a Brazilian company before the International Center for Dispute Resolution in New York.
- Represented the Republic of Turkey in defense of claim of wrongful termination of a license to operate a power plant before the International Court of Commerce venued in Geneva.
- Obtained multi-million dollar judgment against Asia-Pacific restaurant master franchisee and its guarantors for breach of a multi-territory master franchise agreement. Contract breach due to non-payment of royalties, advertising fees, minimum fees, and other fees over a three year period. Arbitrated before the American Arbitration Association under its international rules.
- Obtained million dollar settlement for restaurant franchisor in Japanese master franchise agreement buy-out/termination, following multi-day negotiations and mediation.
- Successfully defended restaurant franchisor against fraud claims by foreign master franchisee. Overseas action was dismissed after we filed suit in Texas to compel arbitration and the court ordered arbitration.
- Represented U.S. patent holder and trademark licensor against Brazilian company before the International Centre for Dispute Resolution in New York City.
- Lakes Gas Co v. Fencl Oil & L.P. Co., Inc., et al. (N.D.Iowa) Secured a unanimous $2.7 million jury verdict in contract action involving propane distribution on behalf of Lakes Gas Company.
- Pinnacle Pizza Co. v. Little Caesar Enterprises (D.S.D.) Obtained summary judgment in favor of pizza franchisor Little Caesar Enterprises, Inc. in a copyright and trademark infringement dispute. Successfully represented Little Caesar Enterprises on appeal affirming the district court's decision.
- Monster Cable Products, Inc. v. Monster Mini Golf, LLC (E.D. Cal.) Defended franchisor of Monster mini-golf course concept and one of its franchisees in federal trademark infringement and unfair competition case brought by Monster Cable, Inc. claiming that its various MONSTER trademarks were being infringed. Monster Cable claimed it had accumulated a portfolio of licenses and trademark rights to use the word “Monster” in connection with various business applications. Settled on favorable terms.
- DeGiovanni v. Jani-King (D. Mass.) Myers v. Jani-King (E.D. Pa.) Class action alleging violation of state wage payment laws, misclassification of franchisees as employees, and unfair and deceptive trade practices. Additional issues include enforcement of forum selection clause, choice of law clause, and inherent “fairness” of royalty and other fees disclosed in FDD and contained in franchise agreement.
- Huntington Learning Centers, Inc. v. The Education Gateway, Inc. (C.D. Cal.) Action to enforce terms of confidentiality agreement and breach of franchise agreement arising from alleged non-payment of royalties; default obtained against former franchisee.
- Barkan v. Dunkin’ Brands, Inc. (D.R.I.) Represented Dunkin Brands related to $13,000,000 fraud and breach of contract claims by former franchisee. Jury trial in December 2009 ended in mistrial, and retrial in January 2010 ended in directed verdict for franchisor. Appeal to First Circuit is anticipated.
- GHN, Inc. v. Volvo Cars of North America (San Bernardino Cty. Super. Ct.) Represented automobile franchisor in lawsuit alleging that it breached agreement and defrauded dealer in connection with mandatory facility improvements, allegedly rendering the dealer less profitable. Mediated to favorable conclusion.
- Ford Motor Credit Co. v. Wilhelm & Associates, Inc. (C.D. Cal.) Defended automobile company in lawsuit alleging fraud, negligent misrepresentation, conspiracy, and unfair business practices in connection with decision by Ford Motor Credit Corporation to cease providing financing to Mazda dealers concurrent with automobile industry fiscal crisis. Obtained dismissal of all claims except fraud; case settled on extremely favorable terms.
- Kiddie Academy Domestic Franchising LLC v. Faith Enterprises DC, LLC (D. Md.) Defended multi-million dollar fraud and breach of contract claims by franchisee. Summary judgment in favor of franchisor on all claims.
- Cold Stone Creamery, Inc. v. P&C Creamery (D. Mass.) Represented Cold Stone Creamery in an action to enforce franchise termination and post-term covenant. Franchisee filed for bankruptcy upon franchisor’s filing of complaint. Also, represented franchisor in related adversary proceeding in bankruptcy court and obtained preliminary injunctive relief shutting down location and enforcing post-term covenants.
- Manhattan Bagel of Northeast, Inc. v. Manhattan Bagel Co. (N.J. Super.) Represented Manhattan Bagel Co. after franchisees claimed breach of contract due to changes in the franchise system and lack of franchisor support. Franchisor compelled arbitration and was awarded entire amount sought for past and future royalties. Franchisees filed bankruptcy during the proceeding, and franchisor successfully objected to a discharge.
- Meade v. Essential Brands (D.N.J.) Represented Essential Brands in successfully obtaining motion to dismiss RICO, securities law and franchise law claims.
- Lakes Gas Co. v. Clark Oil Trading Co., (D. Kan.) Successful settlement of multimillion dollar propane conversion case on behalf of Lakes Gas Co.
- Necessary Formality in Franchise Agreements
Commercial Leasing Law & Strategy | March 1, 2013
The article, co-authored by franchise & distribution practice group leader Craig Tractenberg and Boston franchise & distribution partner Gregg Rubenstein, discusses a recent federal court decision suggesting that expansive and formal franchise agreements are a necessary evil.
- Legal Issues Related to International Franchise Expansion
Franchising World | March 1, 2013
Washington, DC, partner Kendal Tyre co-authored this column discussing considerations U.S. franchisors should keep in mind as they consider international growth opportunities.
- Helpful Amendments Made to the Pennsylvania Health Club Act
The Legal Intelligencer | February 22, 2013
New York City partner and leader of the firm’s Franchise & Distribution practice Craig Tractenberg discusses new amendments to the Pennsylvania Health Club Act.