There is an insidious trend developing in the franchise sales arena: Lawyers are being sued when bad things happen to a franchisee as a result of alleged defects or misdeeds in the franchise sales process.
As reported by Janet Sparks in the August 2009 issue of Franchise Times, there are several suits now pending where, when a franchisee failed, the franchisee has named the outside law firm for the franchisor as a defendant. The article indicates that in these cases, there have been points—often not well-delineated ones—where lawyers, in addition to acting incompetently as lawyers, have crossed the line and have become actively engaged in the franchise sales process in business roles—that is, promoting franchise sales and otherwise acting more like a franchise sales person than a legal adviser. In other words, they are doing more than simply advising clients about franchise laws, preparing the necessary disclosure documents, counseling franchisors on required sales procedures, and making requisite filings with state officials—the traditional roles performed by lawyers. They have become part of the business enterprise.
