During this post-recession environment, stalled growth and revenues has spurred franchise companies, like many other businesses, to evaluate ways to reduce costs and overhead. Not surprisingly, franchise companies have begun to focus on ways to reduce their annual legal costs. In furtherance of this effort, franchise systems have been implementing traditional legal fee containment mechanisms. These containment strategies include: discounted or blended rates, fixed fees, third party audit of legal bills, increased use of in-house counsel or other alternative fee arrangements.
These containment strategies distract from the most fundamental approach for a true reduction in legal fees and costs: implementing measures to proactively identify and resolve issues before they result in expensive and costly legal problems.
A substantial flaw in relying primarily on containment strategies to reduce your legal fees is that they are implemented during the latter phase of a dispute when the issue has escalated into an expensive and time consuming legal matter. Legal fee containment strategies are inherently limited, as the focus is on trying to manage the cost of the bucket of legal issues.
In contrast, Stark & Stark’s Proactive Franchise Solutions emphasize identifying issues early on and proactively taking measures to implement a resolution before they escalate into more serious problems that can affect your franchise system.
Stark & Stark’s Proactive Franchise Solutions include:
- 360° Franchise Sales Compliance
- Proactive Operational Compliance
- Franchisee Validation Audits
- Disclosure Document Audits
- Proactive Communications
- Disaster Preparedness
The predicate of each Proactive Franchise Solution is to assist a franchisor in shrinking its bucket of legal issues and problems, resulting in reduced legal costs, increased System compliance and improved franchisee relations.
For questions, or additional information on how Stark & Stark can help you & your franchise system, please contact Adam J. Siegelheim, Chair of Stark & Stark’s Franchise group at 609.791.7003 or via email, asiegelheim@stark-stark.com.
