Mergers, Acquisitions and Other Changes in the Franchise System

What happens if there is a merger, acquisition or other system changes?

Is your franchisor going to sell out? Or has it already been acquired by a private equity firm and made fundamental changes?   

Mergers, acquisitions, spin-offs and other changes in your system can mean that the business you have now – or that you will have -- is different from the business that you bought. If this is the case, you may have rights to protect your business or to get damages.

When new owners take over a franchisor, new interests come into play. Franchisors may have pressures from stockholders to boost profit margins; investment bankers may have bought the system so that they can squeeze out the last dime and flip the business to a new owner at a nifty profit. You, the franchisee, do not want to be the fodder for such corporate change. You should act.

What can you do for me if my franchisor is considering a merger, acquisition or other system change?

Look at what could have happened – but did not – because franchisees and dealers, working together with Michael Garner, deployed a strategy that saved and protected their businesses:

We stopped the acquisition of the Great American Cookie Company by Mrs. Fields, and made Mrs. Fields come to the bargaining table to negotiate the rights of the Cookie Company franchisees.

Weight Watchers franchisees were faced with losing millions of dollars when the franchisor started selling weight-loss programs over the Internet. After we filed for an injunction in Supreme Court, New York to stop the sales into their territories, Weight Watchers reformulated its program to give the franchisees a fair share of internet business.

When a Fortune 10 company tried to spin off its franchise system to an unqualified buyer, we intervened and obtained a settlement for the franchisees in the millions of dollars.

If your system already has gone through a change of ownership, you may be entitled to get out of your agreement or to get an award of damages. 

Franchisor efforts to take over franchisee businesses are as varied as the imagination itself. Michael Garner has helped dozens of franchisees protect themselves and enhance the value of their businesses through aggressive and creative legal solutions.

Click here to contact us or give Michael a call.