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Attorneys focus on growing clients’ firms at ABA annual forum


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Believe it or not, franchisors, those high-priced lawyers you pay are thinking about building your business, not just about legal details, when they toil to draft your documents. 

At least they were at the American Bar Association’s annual Forum on Franchising October 3-5 at the JW Marriott at L.A. Live in Los Angeles. Business, not legalese, was the main topic of discussion at session after session.  

But theirs is not a black-and-white endeavor, and many workshops included lively debates about how best to help their clients grow. The sophisticated and conflicting arguments illustrate the need for top-notch counsel.

Lesson No. 1: When drafting documents, don’t do it in a vacuum. “More now than ever, franchisees are shopping around. If you have an onerous, long, complex contract, 100 pages or more, it’s going to hurt you,” said Max Schott, of Gray Plant Mooty in Minneapolis.

“It’s not just a contract in a vacuum. It’s being used in the marketplace. It can be used as a detriment to sales or as a positive to sales.”

Audience members applauded a similar point made at another session. “I can tell you when I review those agreements and it’s complicated, I look the client in the eye and say ‘Run!’ Sometimes these things can kill a sale.”

ABA Forum on Franchising

Lawyers networked poolside at the forum.

Another spoke up: “Can I just say ‘Amen’ to what the fellow just said? I look at two contracts a month and I rank them 1 to 10 for complexity. Anything above 7, I say avoid. All franchise agreements are slanted to the franchisors, but some are really slanted,” he said.

Lesson No. 2: Don’t over-share on your franchise disclosure document. Dennis Wieczorek, of DLA Piper in Chicago, contrasted the FDD from disclosures required by the Securities & Exchange Commission. “The FDD is different from an SEC document.  An SEC document says, What are the risks? That’s not what you do with the FDD.”

Instead, stick to the requirements. “Here are the 23 things you have to disclose. Don’t throw any crap in there. Don’t go freelancing in the FDD. Answer the questions thoroughly and accurately,” he said.

For franchisors with the long view—and that should be everyone—the key document is the acknowledgement of receipt that the franchisee has received the FDD. If you’re doing M&A, that is, trying to sell to a private equity firm or other investor, due diligence is going to include an accounting of those receipts.

Lesson No. 3: Time is money for attorneys (and everybody else), and the forum dedicated a session to tips on managing it. “Make your time decisions consciously, because how we choose our time, moment by moment, directly affects how our work goes,” said Margaret Spencer Dixon, a lawyer and consultant who specializes in helping attorneys improve their time and stress management skills.

Her first technique is simple math. Take a calculator, and figure out how much time you’d free up if you do something with those random waiting moments we all have. “It’s so easy to fall into the habit of frittering those away. Those 15-minute bits add up,” she said. 

 
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