Franchising, retail, business
23/11/2015
The rules of professional conduct governing the legal profession set out parameters with respect to the types of advice lawyers can and cannot give, but franchise clients often expect a degree of professional advisory services that exceed those boundaries.
For many franchise lawyers that expectation posses a dilemma. At a round table discussion I facilitated at the Ontario Bar Association’s Franchise Law Conference on how to help emerging franchisors achieve their next level of growth, lawyers expressed differing views and varying levels of comfort with respect to the extent they can and should be their clients’ business advisers.
It is nearly impossible to separate legal advice from business advice, especially in an area such as franchise law, which is populated by startup and entrepreneurial clients. Clients are correct to expect that their legal advisers — who claim to specialize not only in the area of franchise law, but also in the franchise industry — should be able to guide them and make recommendations on business terms relating to the expansion of their franchise program, including matters such as franchise fees, supply chain management, promotional activities, methods of franchising and whether franchising is even the right fit.
Often, lawyers will answer such questions by responding that it is a “business decision” and, therefore, not one the lawyer can advise on. In some circumstances, that may be true, but as advisers to the franchise industry (and, in particular, the startup and emerging businesses that comprise the industry), I think those lawyers may do their clients a disservice, especially if they don’t understand enough about that client’s business to be able to offer pros and cons, risks and rewards and, ultimately, a recommendation. However, lawyers and clients must be aware of certain limitations with respect to the advice that is appropriate to be given and, in turn, relied upon.
By:http://business.financialpost.com/entrepreneur/know-what-your-franchise-lawyer-can-advise-on-and-when-you-need-to-look-elsewhere