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Senior Communications Manager
Robert Smith Discusses Potential Challenges in Renewing Franchise Contracts
Robert A. Smith, chair of Wiley Rein’s Franchise Practice, was quoted in the May 2015 issue of Franchise Times, in an article about disputes that can arise between franchisors and franchisees at contract renewal time.
Mr. Smith said conflicts typically occur in three broad areas. The first is remodel mandates, because a long-time franchisee may not see the return in spending the money. The second is changing territories. “One thing I’ve learned over the years, if anybody has exclusivity and you try to take it away, that can cause a huge fight,” he said.
The third challenge is reinterpretation of the brand, Mr. Smith said. He added that franchisors can take steps during the contract renewal process to reduce potential litigation.
“By listening to the franchisee and making your case from a rational perspective, not an emotional perspective, the franchisee will maybe accept it,” he said. “That sounds so easy, but it’s so hard to do.”
The article can be found here.