I have written often on the subject of the complexity of franchise agreements, and the clear trend over the past 4 decades to make them even longer and more complex. Why has this trend developed?
I see 3 reasons. The 1st is caused by technology. For those of us old enough to remember mag-cards, mag-tapes, and even carbon paper, we have seen an exponential change in technology that has allowed us to produce longer documents with greater ease with the inevitable effect of allowing attorneys to prepare longer documents with less burden. Does this mean that legal fees have gone done down, after adjustment for inflation? Probably not.
And that brings me to the 2nd reason: Protection. To the franchisor, one of the advantages of a carefully crafted franchise agreement is that it will provide more rights and more protections. For example, 30 years ago an arbitration clause might simply read:
‘Any and all controversies between the parties shall be resolved through binding arbitration conducted under the rules of arbitration of the American Arbitration Association.’
Was this an effective provision? It would undoubtedly send the parties to an alternative dispute forum, with all the attending benefits and burdens, if that is what the franchisor wanted to accomplish. Did it unlevel the playing field in the franchisor’s favor, as so often franchisors want to do? Not really. And this observation is what has caused arbitration clauses, like The Blob (for all you old-time movie goers), to swell in size.
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