Franchise Reorganization & Bankruptcy

Bankruptcy, regardless of where it may arise in connection with a franchise system, often presents challenging legal, practical, and strategic issues for a franchisor’s business. What rights, responsibilities, obligations, and prohibitions does a franchisor have when an entity connected to its system files for bankruptcy protection? Whether it is franchisees, critical suppliers, distributors, or key business partners on the verge of bankruptcy or in bankruptcy, a franchisor must understand the implications of what that bankruptcy will mean for its franchise system. Our team of bankruptcy experts can guide franchisors in the unique and technical intersection of bankruptcy law and franchise law to answer these and other questions.

Because default and termination issues are often at the center of litigation with franchisees, franchisee bankruptcy matters often turn on the issue of whether franchise agreements have been properly and effectively terminated prior to a bankruptcy filing. Protecting a franchisor’s rights under the bankruptcy code is vital to keeping its franchise system healthy and under the franchisor’s control. We have represented franchisors throughout the country in bankruptcy court in protecting their interests when bankruptcy policies and the bankruptcy code can be hostile or directly opposed to a franchisors’ interests.

Our national franchise practice gives us a unique perspective to help our clients navigate the common problems experienced by all franchisors in bankruptcy matters. Our franchise attorneys work closely with our bankruptcy team to stay current on the latest bankruptcy developments and how that may impact our franchisor clients. We also work with a network of outstanding local attorneys when retaining local counsel makes sense. We also work closely with in-house counsel and business leadership to reduce exposure should bankruptcy become a threat to a franchisor’s business.

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