Is A Franchise Agreement Negotiable?

Nancy L. Lanard

Case Conclusion Date:October 19, 2005

Practice Area:Franchising

Outcome:Added Addendum to "Non-Negotiable" Franchise Agr.

Description:Client wanted to buy a franchise. When checking the records of the state of his proposed territory, we found a similar business operating under the same name as the franchisor's brand, but unrelated to the franchise. The franchisor did not provide for indemnification (hold harmless) for trademark infringement actions against any franchisees. The little business in his proposed territory, pre-dated the franchisor's registration of its trademark and therefore had priority rights to the name. Potentially my client could have opened up the franchise, been sued for trademark infringement by the existing business under the same name, and spent tens of thousands of dollars to defend a lawsuit, or settle, and have to change the name on his business and then been in violation of his franchise agreement. We went back to the franchisor and successfully negotiated an addendum to the franchise agreement covering this situation, thereby potentially saving the client thousands of dollars.