Franchise Law

Franchise Registration & Transactions | Franchise Litigation | Trademark Enforcement | Enforcing Franchisor's Rights In Bankruptcy | Enforcing Real Estate Rights | Restaurant Risk & Crisis Management

Caiola & Rose serves as national counsel to some of the largest restaurant, hospitality, service and product franchisors in the country.  The firm provides extensive disclosure, registration, compliance, and transactional services to national and international franchisors.  The firm also has a robust franchise litigation practice representing franchisors in claims involving trademark infringement, fraudulent inducement, breach of contract, specific performance, injunctive relief and damages.  The firm’s expertise in real estate litigation is of particular import to franchisors seeking to navigate the intersection of franchise law and real estate law.

Franchise Registration & Transactions

Caiola & Rose represents national franchisors in all aspects of transactions with franchisees, state and federal compliance requirements, and third-party vendor management. The firm also provides general counsel services to many franchisors who do not have in-house legal counsel. The firm’s scope of franchise services includes:

• Preparation of disclosure documents.          
• State and Federal Registrations.
• Compliance Counseling.
• Operations and Supply Chain Counseling.
• Negotiation and preparation of franchise agreements, assignments, terminations, amendments, and other franchise related documents.
• Negotiation and counseling services with third-party suppliers and vendors.
• Negotiation and counseling services with third-party landlords.
• Navigation of competing security interest during corporate take-overs of franchise locations.

Franchise Litigation

Caiola & Rose routinely represents franchisors in prosecuting and defending claims against franchisees. The following is sampling of some of the firm’s experience in representing franchisors:

• Successfully defended national franchisor in claims made by franchisee for fraud related to FDD.
• Successfully defended claims by franchisee that early termination of franchise unit was authorized due to Florida DOT’s exercise of eminent domain rights impacting increase and egress to unit.
• Represented national franchisor in condemnation action where franchisor, franchisee, ground lessor and other third-party creditors competed for funds deposited by Georgia DOT.
• National counsel to franchisor in multistate litigation in order to obtain and enforce temporary restraining order against franchisee prohibiting the sale of unapproved food product.
• Successfully obtained and enforced permanent injunction with the cooperation of law enforcement in order shut down numerous restaurants being operated by former franchisee in violation of non-compete covenants.
• Successfully obtained and collected on judgments for liquidated damages and unpaid royalties against franchisees and personal guarantors after early termination of franchise agreement.
• Obtained full collection on numerous judgments entered against franchisees and guarantors.
• Lead counsel to national franchisor in multi-state foodborne illness outbreak, including: development of franchisee recovery plan and settlement package; coordination of insurance indemnities throughout franchise system and up the supply chain; development of strategy for defending multi-district personal injury claims by customers who consumed contaminated product; and recovery of economic and business interruption losses from suppliers and insurance carriers.
• Obtained preliminary and permanent injunctions requiring both current and former franchisees to shut down business operations that violated the franchise agreement’s non-compete covenants.
• Enforced non-compete covenants against non-signatories to the franchise agreement and guaranty by demonstration close affiliation and involvement with franchisee’s business.
• Domesticated and enforced foreign injunctions prohibiting ongoing violation of noncompetes.

Trademark Enforcement

Caiola & Rose prosecutes claims in federal and state court to enforce franchisor’s trademark rights. The firm’s experience in this area includes the following:

• Obtained permanent injunctive relief and multi-million dollar judgment in favor of international franchisor bringing claims against former franchisee for trademark infringement, unfair competition and related claims under the federal Lanham Act.
• Enforced court-ordered injunction by enlisting law enforcement to remove signage owned by former franchisee that was substantially similar to franchisor’s federally protected marks.

Enforcing Franchisor's Rights In Bankruptcy

Caiola & Rose specializes in protecting franchisor’s rights in bankruptcy. Additionally, the firm counsels franchisors to best position themselves, their brand, and their market presence to maximize recovery even in unexpected circumstances. Caiola & Rose represents franchisors as creditors in bankruptcy to:

• Enjoin a franchisee’s continued unauthorized post-termination use of franchisor’s marks.
• Obtain relief from stay to enforce post-termination covenants, including enforceable non-competes.
• Obtain relief from stay to proceed with pending pre-petition litigation.
• Defend the debtor or trustee’s preference and avoidance claims.
• Litigate and oppose franchisee’s attempts to assume terminated and expired franchisee agreements.
• Litigate and oppose franchisee’s attempt to assign franchise agreement without required franchisor review and approval.
• Move to dismiss post-termination bad faith filing by franchisee.
• Maximize recovery of claims by asserting franchisor’s Section 503(b)(9) claims, critical vendor claims, and other administrative priority claims.
• Assert, litigate and defend challenges to secured lien claims on a franchisee’s FFE and A/R.
• File claims.

Caiola & Rose provides insolvency-related counseling to:

• Evaluate franchisor’s UCC filings and procedures for maintaining perfected interests.
• Advise franchisors on optimal and enforceable remedies upon a franchisee’s insolvency or bankruptcy.

Enforcing Real Estate Rights

Caiola & Rose has extensive experience in helping franchisor’s exercise and enforce their rights related to real estate. Some of the firm’s representative experience includes:

• Successfully represented franchisors as both landlords and tenants in navigating complex commercial leases and exercising rights under SNDA’s, collateral assignments, and purchase option agreements.
• Represented national franchisor in condemnation action where franchisor, franchisee, ground lessor and other third-party creditors competed for funds deposited by Georgia DOT.
• Successfully defended claims by franchisee that early termination of franchise unit was authorized due to Florida DOT’s exercise of eminent domain rights impacting increase and egress to unit.
• Successfully represented franchisor in multistate unlawful detainer actions initiated by landlord.