DEALING WITH NONCOMPLYING FRANCHISEES

As franchise lawyers, we at Kern & Hillman, LLC know a lot about dealing with non-complying franchisees. However, it is important to understand that compliance problems are not strictly legal matters. The most important work that we can do for clients with non-complying franchisees is to help them identify and resolve specific problems before legal disputes arise. We help the client with both “The Carrot” and “The Stick.”

“The Carrot”
We help franchisors develop Systems to Encourage and Reward Compliance by Franchisees.
Franchisors who build systems with clear, positive incentives for their franchisees to keep in compliance can do a great deal to prevent conflict. We know the great cost in time, energy and, of course, money that the franchisor incurs when a simple dispute over compliance escalates. We help clients implement programs to avoid and resolve compliance problems to avoid litigation.

“The Stick”
This is synonomous with progressive disciplinary procedures. In most franchise systems there are always a few franchisees who simply will not or cannot comply with their obligations. These franchisees need to be dealt with firmly, systematically, fairly and aggressively. Disciplinary procedures have to comply with state laws in many cases. Franchisors should not take an ad hoc approach to dealing with noncomplying franchisees. We work with clients to establish procedures for dealing with intransigent franchisees. This will ensure that your company can quickly, when necessary, manage noncomplying units effectively. Let us help you put Franchise Enforcement Systems in place.

Communication Promotes Compliance
In addition to the written policies and procedures which allow companies to make effective use of The Carrot and The Stick, we work with clients to use Communication And Publicity as Compliance Tools in the effort to enforce their franchise standards.

Your Franchise Agreement – A Key To Enforcement Of System Standards
Of course, as franchise attorneys, we provide clients with Franchise Agreement Clauses for Practical Enforcement. We draft strong, enforceable Franchise Agreements for New Franchisors, but if you already have a franchise agreement we can counsel you about changes and additions to Enhance Your Enforcement Capabilities.

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