Legal Eagle Talks Disputes, ‘Demise’ of Mom-and-Pop Operator
Quentin Wittrock is retiring from Gray Plant Mooty after 32 years with the law firm.
Quentin Wittrock has seen plenty of evolution in the franchise industry during his 32 years as an attorney with Minneapolis firm Gray Plant Mooty, perhaps the most impactful and far-reaching being the rise of the large multi-unit operator.
“I think the biggest change is there are fewer one-unit franchise operators,” said Wittrock, who’s retiring in August and offered his take on the industry he’s worked in his entire career. “Franchisees are becoming less frequently mom and pop, they’re large operators. The effect of that on a litigator such as myself is there are fewer small cases or one-on-one disputes.”
With what he called the “demise of the mom-and-pop operator” has come a change in how franchises are operated at the store level, which can ultimately have a big impact not only on performance but also the nature of employee relationships with franchisees and the franchisor.
“I’d say it’s a detriment to the industry in that the operators at the store level are fewer owner-operators,” says Wittrock, whose specialty is the intersection of franchise law, representing franchisors, and disputes, specifically those involving antitrust and pricing. “The person working at the franchise business is less and less often the franchisee,” and as fewer franchisees are owning more units, “when there are disputes, generally speaking, they’re larger disputes.”
Class action lawsuits or third-party disputes, such as when employees within a franchise system are challenging the franchisor, are becoming more common, noted Wittrock. “And even consumers bringing claims against an entire franchise system.”
As the labor shortage continues to frustrate franchisees, particularly those in the restaurant, hotel and hospitality segments, and put pressure on profit margins, an increase in lawsuits could be on the horizon.
“As franchisees get in jeopardy with their business, they often seek to pass the blame” to the franchisor, said Wittrock.
A silver lining of the shift to larger, more sophisticated operators has been an improvement in the structure of franchise contracts, which Wittrock said have become much better written. “When I first started, you’d see agreements that were wacky,” he said. “Now they’re much more consistent with best practices … more uniformity, which results in fewer disputes. Good, well written contracts are a good thing.”
Wittrock, who joined Gray Plant Mooty in 1987, said when he came out of the University of Iowa College of Law, he knew he wanted to be a litigator. “When I became a lawyer the question was do you want to be a transactional attorney or a litigator and I wanted to be a litigator,” he said of wanting to argue cases in the courtroom.
Wittrock recalled his “biggest and most significant case for franchising” was Collins v. International Dairy Queen, a class action lawsuit in U.S. District Court for the Middle District of Georgia in Macon.
“The franchisees were claiming antitrust and contract violations in the supply of products to the franchise system,” said Wittrock of what was a six-year case with several arbitrations that resolved how and from whom the franchisees could obtain products. “The results reaffirmed the right of the franchisor to require uniformity and quality of supplies while establishing procedures for franchisees to seek alternative sources of items ranging from cups and lids to chicken tenders.”
Over the course of his career Wittrock also acted as a mediator in many legal disputes, a role he plans to continue after leaving Gray Plant Mooty. Included on the Franchise Times Legal Eagles ranking every year since 2007, Wittrock joined the Legal Eagles Hall of Fame list in 2016.