“How are you guys different from a typical law firm?”
We’ve answered this question several times recently in response to inquiries from franchisors about EntrePartner’s “Outside In-House Counsel” services. Thus, we’re including our response on our blog to help explain how we work with emerging, growing, and established franchised brands from a legal perspective.
Due to the nature of being in a regulated industry, every franchisor has ongoing and regular legal needs. This goes far beyond drafting an initial Franchise Disclosure Document and preparing annual updates. A growing franchisor is required to comply with ongoing regulatory requirements, as well as establish new systems for franchisee relationships and disputes, support its franchise sales program, comply with agreements, adopt new system standards and policies, and pursue additional growth avenues such as alternative growth structures and international growth.
Depending on certain factors, such as a franchisor’s size, industry, and growth trajectory, those legal needs can range from a standard set of projects, to a specified number of hours of legal support each month. For example, every franchisor will need a standard set of compliance documents to administer its franchise agreements, and ensure that the legal foundation to enforce those agreements against the appropriate people is in place. Additionally, a myriad of issues typically come up in day-to-day operations of a franchise program. Some specific requests that we have heard recently:
• What happens when a franchisee brings in a new partner?
• What do we do if a franchisee wants to sell or transfer its business?
• What if a franchisee wants to move its territory?
• What documentation do we need for a site approval process?
• What do we do if a franchisee misses its required opening date?
• What information can our sales team provide to a prospect?
• What terms should our vendors be required to adhere to?
• What disclaimers and terms should our ops manual and policies include?
Our team of former in-house lawyers provides the answers, and helps establish templates and systems to deal with these and other common recurring issues. Unlike most law firms, though, we provide these services through predictable flat fee arrangements or ongoing subscription agreements with discounted legal rates. Most of our clients that choose this model subscribe to a certain number of attorney hours per month at exclusive, reduced hourly rates. The more hours needed, the lower the hourly rate. While our clients appreciate the financial savings of this arrangement, equally important is the fact they get more in-depth representation. Our subscription clients may take advantage of unlimited emails and phone calls of 15 minutes or less, and a free, monthly client check-in lunch (or happy hour) meeting to discuss ongoing matters, business operations or other topics as necessary – which allows us to have deeper insight into our clients’ businesses.
We have found that this model can significantly delay the timeframe in which a franchisor needs to incur the payroll expense of a full-time general counsel. It also avoids the need to incur big firm legal rates for every question asked or document needed. Having represented many franchisors across various industries, our lawyers draw from a wide range of experience to solve both legal and business issues. Not only that – our lawyers have actually been franchisors AND franchisees, too! This allows us to offer insights beyond those provided from a purely legal advisor.
EntrePartner is founded on the belief that legal services can be provided in a different way. As entrepreneurs ourselves, we represent our clients the way we would want to be represented. First of all, we provide all services at a reasonable and predictable cost – whether that be subscription agreements, flat and capped fee arrangements, or proactive discussions with our clients about their legal budgets and corresponding value for services. In this manner, we focus on developing long term strategic alliances rather than maximizing legal fees.
Secondly, where we really excel is helping our clients translate legal advice into smart business decisions. We leverage our in-house and on-the-ground business experience to help clients avoid the common mistakes that many growing franchisors make, or reinventing the wheel with every issue. Whatever the issue, we’ve likely seen it or something like it (or are able to connect clients to the person who has), and have a first-hand awareness of where it should fall in your priorities list. We combine that actual business and operational experience with legal expertise to do what we do best: help you create, grow, and protect your franchise system.