Franchise and Distribution Law

Under California's board certification program the standards and rules define various terms such as franchise, franchisor, and franchisee.

The term "franchise and distribution law" is defined to encompass matters involving franchise or other distribution relationships, and includes but is not limited to matters involving the the Seller Assisted Marketing Plan Act, the FTC Rule, the California Franchise Investment Law, the California Franchise Relations Act, and other similar types of industry-specific laws or state, federal or foreign laws.

“Franchise agreement” means a contract between a franchisor and a franchisee granting a franchise and governing the franchise relationship.

Under California's board certification program, the definition of the term “distribution agreement” is "a contract between a supplier and a distributor for the sale of or offer to sell goods or services, including but not limited to a license granted by a supplier to a distributor of the right to produce goods or services and to sell or offer to sell such goods or services."

Under California's board certification program the definition of "distribution" is "the sale of or offer to sell goods or services pursuant to a contract between persons operating at different levels of the production or distribution chain, including a license of the right to produce goods or services and to sell or offer to sell such goods or services."

The term “litigation” is defined under the board certification standards as "any case or controversy before a court or in binding arbitration, where the amount in controversy exceeds the current minimum amount for federal diversity jurisdiction; or formal adversarial proceedings before any governmental regulatory agency or bureau or tribunal, without reference to any monetary limitation."

The term “distributor” is defined to mean "any person who, pursuant to a contract with a supplier, sells or offers to sell goods or services directly or indirectly to the end-user, including but not limited to the licensee of the right to produce goods or services and to sell or offer to sell such goods or services."

The term “Supplier" is defined to mean any person "who sells or offers to sell goods or services to one or more distributors, including the licensor of the right to produce goods or services and to sell or offer to sell such goods or services."

An attorney seeking board certification in franchise and distribution law must demonstrate that within the applicable time period he or she has been substantially involved in the specialty practice area of the law.

The standards set out certain take requirements. Each task has certain points available. Completing the tasks in certain combinations constitute a prima facie showing of substantial involvement in the practice of franchise and distribution law. The various tasks include:

• Representing the franchisor in the structuring of a franchise program, including the drafting of the franchise agreement and related documentation including any disclosure documents required by law.

• Representing the supplier in the structuring of a distribution program other than a franchise program, including the drafting of the distribution agreement and related documentation.

• Preparing and filing of regulatory applications for initial registration.

• Preparing and filing of substantive post-effective amendments of a franchise program and individual applications and applications for coordinated review may be used to satisfy this requirement.

• Representing the seller or purchaser, with respect to the franchise or distribution law issues, in a merger or acquisition involving a franchise or distribution program consisting of at least 10 franchisees or distributors, in a single or related series of transactions.

• Preparing and filing of substantive applications for renewal.

• Representing a current or prospective distributor in connection with the acquisition or transfer of a new or existing distribution agreement.

• Providing substantive written legal advice or analysis regarding the application or non-application of the franchise or distribution laws in the United States in connection with a commercial relationship.

• Representing a current or prospective franchisee or franchisor in connection with the acquisition or transfer of a new or existing franchise.

• Providing substantive written legal advice or analysis to associations of franchisees or distributors, or assisting in negotiations on behalf of any associations of franchisees or distributors, in connection with franchise or distribution law matters.

• Providing substantive written legal advice or analysis regarding the cancellation, termination or non-renewal of a franchise or distribution agreement.

• Providing substantive written legal advice or analysis involving antitrust or unfair competition law issues relating to franchise or distribution relationships.

• Providing substantive written legal advice or analysis involving advertising or consumer protection law issues relating to franchise or distribution relationships.

• Providing substantive written legal advice or analysis regarding the applicable franchise or distribution laws in connection with a cross- border franchise or distribution matter or transaction which is inbound to or outbound from the United States.

• Representing a party in a formal mediation as its principal attorney where matters of franchise or distribution law are among the main contested issues.

• Preparing briefs in litigation on appeal to any appellate court where the attorney is the principal attorney responsible for authoring the brief(s) and matters of franchise or distribution law are among the main issues on appeal.

• Preparing or opposing a motion for summary judgment or other dispositive motion in litigation where matters of franchise or distribution law are among the main contested issues.

• Conducting the principal oral argument before any appellate court for litigation on appeal where matters of franchise or distribution law are among the main issues in the oral argument.

• Representing a party in litigation as its principal attorney where matters of franchise or distribution law are among the main contested issues.

• Acting as the principal attorney in devising and implementing the litigation strategy in connection with pending or threatened litigation where matters of franchise or distribution law are expected to be among the main contested issues.

• Providing substantive written legal advice or analysis regarding other material issues concerning a franchise or distribution relationship not otherwise covered above.

• Acting as the principal attorney in devising and implementing a formal compliance program for a client following the entry of a court order or other binding order or award against the client in any litigation where matters of franchise or distribution laws are among the main issues.

• Acting as an expert witness or legal consultant in litigation where matters of franchise or distribution law are among the main contested issues.

• Acting as a judge, arbitrator or mediator in any litigation or formal mediation where matters of franchise or distribution law are among the main contested issues.

An attorney seeking board certification in franchise and distribution law in California must demonstrate that during the applicable period he or she completed the specified number of hours of continuing legal education activities specifically approved for franchise and distribution law.

The rules provide for certain alternatives to the written exam requirements such as speaking at approved continuing legal education seminars on the specialty topic area, authoring published articles or authoring a practice book or chapter in such book in the area of franchising or distribution law.

Franchise law is one of only eleven specialized practice areas recognizes as a Certified Specialty by the California State Bar.

A franchise and distribution law specialist can help you with the operation of your franchise, general business issues, and problems that come up when looking to buy or sell a franchise.

Franchise lawyers represent clients with disputes between franchisees with their franchisors. These attorneys also give advice to clients throughout the process of buying, selling or operating a franchise.