Franchise Disputes

Disputes typically arise between a franchisee and the franchisor or landlord of a shopping center. Franchise disputes/allegations frequently involve:

  • claims of encroachment wherein the franchisee claims that its revenue and resulting profits have been adversely affected due to some alleged improper action on the part of the franchisor;
  • improper termination or non-renewal of the franchise agreement;
  • failure by the franchisor to provide adequate operational support;
  • failure by the franchisor to spend advertising funds appropriately; and
  • inaccurate or inadequate disclosures by the franchisor in the Franchise Disclosure Document (FDD).

The following is a sample of the types of franchise dispute matters for which BTZ has been engaged:

  • Lost profits claims for the master franchisee for the Country of Mexico;
  • Lost profits claims for the master franchisee for the Country of India;
  • Encroachment claims against the franchisor;
  • Analysis of franchisee operating data in comparison to the FDD;
  • Partnership buyout (valuation) of an international franchise concept for a large franchisee group in the Midwest;
  • Buyout (valuation) of an international franchise concept for a large franchisee group on the East Coast;
  • Analysis of a franchisor’s expenditures from the advertising fund; and
  • Calculation of franchisees’ claims for reimbursement of out-of-pocket costs.

The financial calculations and expert testimony of BTZ professionals engaged in franchise litigation matters exemplify the depth of their experience in this field, commitment to accuracy and timely responsive service, as well as their thorough knowledge of and extensive experience regarding:

  • Analysis of the specific franchisee’s financial data;
  • Bench-marking to other similar franchise location(s) performance;
  • Review of data contained in the FDD;
  • Consideration of lease terms and the term remaining on a franchise agreement;
  • Analysis of lost revenue and profits;
  • Analysis of loss of business value or goodwill;
  • Analysis of out-of-pocket costs;
  • Analysis of the use of specifically-earmarked funds, such as advertising funds;
  • Financial statement and financial and operating ratio analysis;
  • Business valuation;
  • Report writing documenting financial opinions for Federal Court; and
  • Expert testimony regarding financial/economic issues pertaining to damages in franchise disputes.

BTZ professionals may be engaged by counsel on behalf of an individual franchisee, a group/class of franchisees, or the franchisor, and may act as an expert consultant or an expert witness providing testimony at deposition and trial. BTZ professionals, also typically, offer rebuttal opinions regarding the opinions of the financial/economic experts designated for the opposing party. In the past ten years, Robert A. Taylor, Principal, has been engaged as the expert in XXX franchise disputes, and as a result, has extensive recent and relevant experience in a broad variety of franchise disputes. Other BTZ professionals who also offer expert consulting and/or expert witness services regarding franchise disputes include:

  • Brian P. Brinig, Principal;
  • Paul A. Zimmer, Principal;
  • Catherine (Kate) Kowalewski, Director; and
  • Darlene D. Babcock, Director