Firms Cash In On Franchising Boom

Angeles Business Journal:

Los Angeles-based franchise lawyers are experiencing a noticeable bump in business because of the increasing popularity of frozen yogurt shops, workout gyms and similar franchises as a method of expansion.

‘The franchising business model is definitely growing in popularity,’ said Brian Cole, an attorney in the Santa Monica office of Bryan Cave LLP who also serves as chair of the California state bar franchise law committee.

‘And lawyers’ practices have grown as a result.’

In fact, the state bar of California next month will offer its first test for attorneys seeking certification in franchise and distribution law. The exam follows the decision earlier this year to add franchise and distribution law to the bar’s list of certified legal specialties that already includes family law, criminal law and 6 other practice areas.

‘This week alone I have gotten five or six calls about new franchising systems,’ said Susan Grueneberg, a transactional partner at Santa Monica law firm Dreier Stein & Kahan LLP, who has represented franchisors SuperShuttle and Jazzercise Inc.

But it is not the growth of franchise related legal services, rather its high degree of technicality that resulted in the bar’s designation in March of franchise law as a specialty.

‘Given the complexity of law in this area and the importance of franchise and distribution to consumers in this state, we thought it important to establish this specialty,’ said Stafford Matthews, chairman of the franchise law consulting group of the state bar, in a written press statement.

In addition to California law, which requires franchise systems register with the state department of corporations, franchisors are also regulated by a specific set of rules issued by the Federal Trade Commission.