The most obvious area in franchising where the lines between franchise consultants and lawyers frequently blur is within the professional services provided to emerging franchisors. Companies new to franchising have difficulty understanding the essential differences between services provided by experienced franchise legal counsel and those provided by qualified franchise consultants in developing the structure and strategy of a franchise system.
Mature franchisors generally have a better understanding of the nature of franchising and what constitutes a business issue and a legal issue, and can therefore engage the proper advisors to assist them. Emerging franchisors often are more naive and are led to believe that because franchising requires defined legal documents and sales methodologies the law has a greater role in the structure of a new franchise system than do the underlying business issues.
Without causing too much consternation among our legal colleagues and friends, in some areas of the law (and certainly in some areas of applying the law), business advisors may have a superior understanding than do lawyers. This is common in many specialized industries and is the linchpin of the debate concerning the unauthorized practice of law. (A discussion of this issue can be found in the 2007 ABA presentation, “The Respective Roles of the Franchise Consultant and the Franchise Lawyer in Structuring the Franchise System,” by Lenny Vines and Michael Seid.)