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Harold Kestenbaum posted thisWhen Should an Emerging Franchisor Stop Using Outside Counsel for Everything? There is a point in the growth of a franchise system when the traditional outside-counsel model starts to become inefficient. Not because outside lawyers are not good. Many are excellent. The problem is the model. A growing franchisor begins generating legal questions almost every day: transfers, defaults, renewals, territory issues, vendor agreements, franchisee complaints, employment questions, marketing programs, disclosure issues and dozens of decisions that do not justify opening a new legal “matter” every time somebody picks up the phone. That is one reason I now spend much of my time serving as fractional in-house counsel. I get to know the business, the people, the franchisees and the history behind the issues. The objective is not to replace specialized outside counsel. It is to know when they are needed - and when they are not. For an emerging franchisor, the right legal structure may not be “in-house or outside counsel.” Increasingly, there is a third option: experienced counsel who functions as part of the management team without the cost of a full-time general counsel. For the right system, that can change the entire relationship between legal and the business.
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Harold Kestenbaum posted thisBEFORE YOU BECOME A 100-UNIT FRANCHISOR Every emerging franchisor wants to grow. But before trying to become a 100-unit system, I would ask a few questions. Are your franchise agreements being administered consistently? Are territory decisions documented? Are defaults addressed promptly? Are franchisee communications reviewed before they create unintended obligations? Are vendor and supplier relationships properly documented? Do you have a process for transfers, renewals, amendments and exceptions? And does someone have responsibility for looking across all of these issues instead of handling each one in isolation? I spent years as the CEO of a franchisor with more than 95 franchisees and 22 years on the board of Sbarro. One lesson stayed with me: A larger franchise system does not simply have more locations. It has more opportunities for small problems to become big ones. Build the legal and business infrastructure before the growth arrives.
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Harold Kestenbaum posted thisBEFORE YOU BECOME A 100-UNIT FRANCHISOR Every emerging franchisor wants to grow. But before trying to become a 100-unit system, I would ask a few questions. Are your franchise agreements being administered consistently? Are territory decisions documented? Are defaults addressed promptly? Are franchisee communications reviewed before they create unintended obligations? Are vendor and supplier relationships properly documented? Do you have a process for transfers, renewals, amendments and exceptions? And does someone have responsibility for looking across all of these issues instead of handling each one in isolation? I spent years as the CEO of a franchisor with more than 95 franchisees and 22 years on the board of Sbarro.
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Harold Kestenbaum posted thisYOUR FDD IS MORE THAN A DISCLOSURE DOCUMENT: Too many emerging franchisors think about the FDD once a year. Update it. File it. Distribute it. Done. I think that misses the point. Your FDD tells a story about your franchise system. Fees. Litigation. Initial investment. Supplier requirements. Financial performance representations. Franchisee turnover. System growth. Taken together, those disclosures can tell management where problems may be developing before those problems become serious. The FDD should not live in a lawyers computer until the next annual update. Management should understand what it says and whether the actual operation of the system matches what is being disclosed. Compliance is important. But the FDD can also be a management tool.
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Harold Kestenbaum posted thisBE CAREFUL WITH EXCEPTIONS One of the most dangerous words in franchising is: “Just this once.” Just this once, we will reduce the royalty. Just this once, we will extend the development deadline. Just this once, we will overlook the default. Just this once, we will give this franchisee a deal nobody else received. Sometimes an exception makes perfect business sense. But every exception should be deliberate, documented and evaluated for the precedent it may create. After decades of dealing with franchise systems and franchisee disputes, I have learned that today's accommodation can become tomorrow's expectation. Be flexible when flexibility makes business sense. Just know exactly what you are agreeing to — and document it.
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Harold Kestenbaum posted thisOUTSIDE COUNSEL VS. DAY-TO-DAY COUNSEL Emerging franchisors absolutely need good outside franchise counsel. But there is a difference between needing a law firm and needing a lawyer who understands the business every day. Not every issue requires a $700-$1,000-an-hour law firm. Many franchise problems start small: a transfer request, a territory question, a franchisee complaint, a vendor contract, a default, a lease issue or an exception someone wants to make. The important question is often not simply: “What does the agreement say?” It is: “What should we do?” That requires legal judgment, but it also requires understanding the business, the franchisees and the consequences of the decision. That is the gap fractional in-house counsel can fill.
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Harold Kestenbaum posted thisTHE WRONG FRANCHISEE A strong franchise agreement cannot fix a bad franchisee-selection decision. I have seen this repeatedly during my career. A franchisor becomes focused on awarding franchises and begins making exceptions to its normal qualification standards. The candidate has the money. The candidate wants to sign. The development team wants another deal closed. Two years later, everyone is spending time and money dealing with defaults, operational problems, unpaid royalties and lawyers. The best franchise dispute is the one that never happens. Sometimes the most profitable franchise sale is the one you decide not to make. Franchisee selection is not just a sales function.
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Harold Kestenbaum posted thisI am interested in bringing my experience to the board of a public or privately held company seeking an independent director with seasoned legal, franchise, governance, and business judgment. My board experience includes: · 22 years as a member of the Board of Directors of Sbarro · Service on the Board of Directors of Crumbs · Service on the Board of Directors of First Foods Group Each of these companies was publicly traded during my board service. These roles gave me extensive experience working with management teams and fellow directors on corporate governance, strategic planning, growth, risk management, regulatory matters, and the responsibilities that accompany service to shareholders and other stakeholders. As a franchise attorney, I also bring decades of experience advising businesses on franchise development, transactions, compliance, dispute avoidance, and the practical challenges of building and protecting a brand. I would welcome the opportunity to speak with public or private companies seeking an experienced board member whose perspective combines legal knowledge, business experience, and more than two decades of boardroom service. Please feel free to contact me directly or share this post with someone who may be interested. Email hkestenbaum@hlkpc.com Phonehkestenbaum@hlkpc.com Phone 516-567-1180
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Harold Kestenbaum posted thisCould your franchise business benefit from fractional legal services by a lawyer with 40+ years experience as a franchise lawyer? As an announcement to the franchise community: My focus is on fractional in-house counsel, strategic advisory work and select franchise matters for franchisors and large franchisees who want experienced, practical legal counsel without the overhead of a traditional law firm relationship. I have spent my career as a franchise lawyer, board member, CEO and business adviser. If your company could benefit from an experienced franchise lawyer in its corner, let’s talk.
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Harold Kestenbaum liked thisTwo years. 💙 Kind of hard to believe. When I look at this picture, I think about how little we knew about what we were getting ourselves into. 😂 We had a plan, a brand-new business, and then Hurricane Helene hit and that plan pretty much went out the window. We opened our doors early and got to work. There have been a LOT of lessons since then. Long days, late-night calls, wins, mistakes, growing pains, and plenty of moments where we’ve had to figure it out as we went. But one thing I’ve had since the very beginning is John. There is something incredibly valuable about building a business alongside someone who truly knows their craft. John has decades of experience in this industry, and I can’t begin to count the number of times I’ve leaned on his knowledge over these last two years. Voda Sarasota would not be what it is today without him. I’m really proud of what we’ve built, but even more excited about what we’re still building. Two years down. We’re just getting started. 💙 Happy anniversary, Voda. And John, thank you for taking this crazy ride with me from day one.Harold Kestenbaum liked this🎉 Two Years of Voda Cleaning & Restoration! 💙 Two years ago, Voda Cleaning & Restoration opened its doors a few days earlier than planned as Hurricane Helene created an immediate need in our community. We had no idea where the next two years would take us. Today, we’re celebrating how far we’ve come and one of the people who has been here since day one: our Operations Manager, John Sherman John’s decades of experience, knowledge, and commitment to doing things the right way have helped shape Voda into the company it is today. Here’s to two years of serving our community, true professionals who have dedicated themselves to mastering their craft, and all the homeowners and businesses we’ll have the opportunity to help in the years ahead. Happy 2 years, Voda! 💙🎉
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Harold Kestenbaum liked thisHarold Kestenbaum liked thisA look inside the room at how we train decision-making with elite athletes in the NFL. As we head into Week 3 of the NFL season, this is a glimpse into that preparation: training athletes to see the game differently, make better decisions under pressure, and perform when the stakes are highest. At the NFL Players Association Summit, I took players inside the core frameworks we use at POISON PAWN. The work happens long before the moment arrives. TRAIN HOW YOU DECIDE. #PlayerNotAPiece #PoisonPawn #NFL
Experience & Education
Publications
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Franchising Sizzles in Wake of Downturn
Forbes.com
Harold Kestenbaum, a noted franchising attorney at New York law firm Gordon & Rees, with more than 500 franchise deals to his credit, has seen a big increase in the number of people looking to own a franchise in the last few years. In fact, the recession helped franchise companies.
Reporter, David Winzelberg, gets Harold's take on the recession's impact on franchise businesses.
Law | Legal Services | Lawyer | Franchise Lawyer | Franchisor Lawyer | Attorney | Franchise Attorney…Harold Kestenbaum, a noted franchising attorney at New York law firm Gordon & Rees, with more than 500 franchise deals to his credit, has seen a big increase in the number of people looking to own a franchise in the last few years. In fact, the recession helped franchise companies.
Reporter, David Winzelberg, gets Harold's take on the recession's impact on franchise businesses.
Law | Legal Services | Lawyer | Franchise Lawyer | Franchisor Lawyer | Attorney | Franchise Attorney | Franchisor Attorney | General Counsel | Franchise General Counsel | Franchisor General Counsel | Attorney at Law | Franchise GuruOther authors -
The Next Steps of a Soon-to-Franchise Restaurant Company
FastCasual.com
See publicationIn my last blog, I discussed what to do once you decide to franchise your restaurant. Now that you've taken those next steps, where do you go from here? The first step is to retain the professionals who you have found. This will require signing up and providing the down payment on their fees. Typically, you will coordinate preparation of the operations manual in addition to development of the legal documents (FDD and the agreements). The accountant is the last professional who needs to be…
In my last blog, I discussed what to do once you decide to franchise your restaurant. Now that you've taken those next steps, where do you go from here? The first step is to retain the professionals who you have found. This will require signing up and providing the down payment on their fees. Typically, you will coordinate preparation of the operations manual in addition to development of the legal documents (FDD and the agreements). The accountant is the last professional who needs to be hired and brought on board.
You will learn that this process does not happen overnight.
Law | Legal Services | Lawyer | Franchise Lawyer | Franchisor Lawyer | Attorney | Franchise Attorney | Franchisor Attorney | General Counsel | Franchise General Counsel | Franchisor General Counsel | Attorney at Law | Franchise Guru
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Franchising Your Business
Blue MauMau | The Franchise Owner's Most Trusted News Source
Attorney and franchisor consultant Harold Kestenbaum talks frankly about all things franchising with Blue MauMau. He recently released his book So You Want to Franchise Your Business.
Kestenbaum, an attorney with the law firm Ruskin Moscou & Faltischek, is a rare individual who serves in the dual capacity of franchisor attorney and consultant. He is on the board of directors for several prominent franchising firms and was a director of Sbarro Inc., a fast food chain with over 1,000…Attorney and franchisor consultant Harold Kestenbaum talks frankly about all things franchising with Blue MauMau. He recently released his book So You Want to Franchise Your Business.
Kestenbaum, an attorney with the law firm Ruskin Moscou & Faltischek, is a rare individual who serves in the dual capacity of franchisor attorney and consultant. He is on the board of directors for several prominent franchising firms and was a director of Sbarro Inc., a fast food chain with over 1,000 locations worldwide. But besides being an attorney, Kestenbaum acts as a franchising advisor to start-up franchising systems. He has been named as one of the top 100 franchise attorneys in North America, based on a survey conducted by Franchise Times, a monthly publication for the franchising industry.
Reporter, Don Sniegowski, interviews Harold about the changing state of the franchise industry and the role he plays in the future development of the industry.
Law | Legal Services | Lawyer | Franchise Lawyer | Franchisor Lawyer | Attorney | Franchise Attorney | Franchisor Attorney | General Counsel | Franchise General Counsel | Franchisor General Counsel | Attorney at Law | Franchise GuruOther authors -
Four Tips to Starting a Successful Franchise
Cambridge Who's Who
See publicationI have written a book, “So, You Want to Franchise Your Business,” that will be in stores on August 1, 2008, and delves into the way a company embarks on the franchise path. It includes the dos and the don’ts of franchising your business. In my book, my co-author, Adina Genn, and I discuss what makes a company right for franchising and how to go about turning a successful business into a franchise company. Here are a few key tips from my book.
Law | Legal Services | Lawyer | Franchise…I have written a book, “So, You Want to Franchise Your Business,” that will be in stores on August 1, 2008, and delves into the way a company embarks on the franchise path. It includes the dos and the don’ts of franchising your business. In my book, my co-author, Adina Genn, and I discuss what makes a company right for franchising and how to go about turning a successful business into a franchise company. Here are a few key tips from my book.
Law | Legal Services | Lawyer | Franchise Lawyer | Franchisor Lawyer | Attorney | Franchise Attorney | Franchisor Attorney | General Counsel | Franchise General Counsel | Franchisor General Counsel | Attorney at Law | Franchise Guru -
So You Want To Franchise Your Business
Entreprenuer Press
See publicationHarold has authored the first book dedicated to the entrepreneur who wants to franchise his/her business, called So You Want To Franchise Your Business. It is a step-by-step guide to what a businessperson needs to know and do to properly roll out a franchise program.
Law | Legal Services | Lawyer | Franchise Lawyer | Franchisor Lawyer | Attorney | Franchise Attorney | Franchisor Attorney | General Counsel | Franchise General Counsel | Franchisor General Counsel | Attorney at Law |…Harold has authored the first book dedicated to the entrepreneur who wants to franchise his/her business, called So You Want To Franchise Your Business. It is a step-by-step guide to what a businessperson needs to know and do to properly roll out a franchise program.
Law | Legal Services | Lawyer | Franchise Lawyer | Franchisor Lawyer | Attorney | Franchise Attorney | Franchisor Attorney | General Counsel | Franchise General Counsel | Franchisor General Counsel | Attorney at Law | Franchise Guru
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ACT-ADR -- Association of Commercial and Transactional ADR Professionals
We are delighted to be hosting members of the Association of Corporate Counsel –Westchester-Southern Connecticut in a candid, open discussion focused on highlighting some of the key reservations parties may have about the arbitral process and meaningful ways in which it can be improved to alleviate these concerns. The objective is simple: engage with constituents who have traditionally shied away from arbitration to discuss how arbitration stakeholders can better align the process with their evolving commercial needs. ACT-ADR -- Association of Commercial and Transactional ADR Professionals Members Myrna Barakat Friedman, Robert Harris and Duncan MacKay will be joined by representatives from co-hosts American Arbitration Association and International Centre for Dispute Resolution® (ICDR) (lead co-hosts), ICC Arbitration and United States Council for International Business (USCIB), CPR Institute- International Institute for Conflict Prevention & Resolution and JAMS, including Jeffrey T. Zaino, Paul Di Pietro and Abbey Pellino Hawthorne. We expect this to be the first of a series of sessions and look forward to a constructive brainstorming session. In-house counsel interested in attending this in-person session or future sessions (in-person or virtual) should feel free to reach out to Myrna, Rob or Duncan for more information.
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Ruskin Moscou Faltischek, P.C.
RMF Partner Russell Stern, Co-Chair of the Corporate & Securities Department and the Veterinary Law Practice Group, was featured in the Long Island Business News’ Special Section: “Mergers & Acquisitions: Unlock the M&A Landscape - Insights for 2026 and Beyond.” Russell emphasizes that successful M&A deals come down to preparation, strong execution, and staying focused on client goals. He notes the importance of a solid team, careful due diligence, and practical negotiations, adding that strong financials and early planning help maximize value and keep deals on track. To read more, please visit https://lnkd.in/e8iSrt5D
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