Franchise dispute lawsuits in Washington and Oregon are big business, just like franchise businesses themselves. We perform a variety of service for our Portland and Seattle franchisor and franchisee clients, from formation all the way through franchise litigation.
Franchises have long been one of the most interesting business opportunities for entrepreneurs nationwide. Oregon and Washington, where Slinde Nelson provides legal advice to services to franchisees and franchisors or all types, are no exception. Franchises can appear a profitable opportunity because a larger company, the franchisor, has already built the brand. Instant consumer recognition can mean quicker market traction and profits.
Franchisor/franchisee relationships are also marked by a very distinct power imbalance. The franchisor is the proverbial Goliath.
The surface attraction of the investment combined with the disparity in bargaining power has lead legislatures nationwide to pass laws to protect franchisees from nefarious overreaching practices by franchisors.
Oregon and Washington share a few things in common. In both states, the franchisor has to provide a franchise disclosure document to the franchisee. In Washington, that document has to be registered with the state.
In both states, misstatements in the franchise disclosure document can lead to lawsuits under the respective franchise acts. As a Washington franchise law attorney, I can tell you that Washington’s law, in particular, is one of the strongest in the country. A misstatement in the franchise disclosure document or the negotiation process can result in triple damages. This means for every $100,000 in damages caused, you can be held responsible for $300,000.
That’s big business and why careful planning with an attorney on the front end benefits both franchisor and franchisee. If you are a franchisor who is offering territories or a potential franchisee looking for an opportunity, make sure a Seattle or Portland franchise law attorney reviews all documents early in the process.