2025's Top Franchise Legal Players: Richard Bayer - Einbinder, Dunn, Dimitri & Bayer

Legal Player: Richard Bayer
Firm: Einbinder, Dunn, Dimitri & Bayer LLP

For Richard Bayer, franchise law sits at the perfect intersection of his education and professional interests. A graduate of NYU Stern, where he studied finance, accounting, operational systems and marketing, Bayer became fascinated with how intellectual property can be monetized, how deals are structured and the paths early-stage companies can take to scale. After law school, where he focused on contract law, licensing, real estate and bankruptcy, Bayer realized he was far more interested in negotiating and drafting contracts than in building financial models. Although no franchise-specific courses existed at the time, Bayer found his way into the field shortly after graduation and joined his current firm nearly 20 years ago.

1851 Franchise reached out to Bayer to learn how franchisors can protect their brand and avoid legal mistakes. Check out his insights below.

1851 Franchise: How did you fall into franchising?

Richard Bayer: Franchise law touches on many different legal areas of interest for me. By way of background, I studied finance, accounting, operational systems and marketing at NYU Stern. I was fascinated with how intellectual property can be monetized, how deals are structured (and why they are structured the way that they are) and what routes early-stage companies can take to scale for growth. I realized that I was much more interested in drafting and negotiating contracts than I was in building financial models.

In law school, I focused my coursework on contract law, intellectual property, licensing, real estate and bankruptcy. There were no franchise law specific courses offered back then. Otherwise, I’m sure I would have enrolled in them as well. With franchise law sitting at the intersection of my educational interests, I consider myself very fortunate to have found it shortly after law school and to have joined my firm about 20 years ago.

1851: What do you see as the most important things franchisors should do to protect their brand?

Bayer: Franchisors should ensure that brand value is at the forefront of every decision they make. We hear from franchisees all the time that the brand was the key differentiator between evaluating competing franchises.

Depending on the franchisor’s legal budget, different steps can be taken, but I can definitely highlight one that all franchisors should consider, regardless of budget — franchisors should have a keen focus on quality control. A strong, duplicative customer experience is paramount and franchisors who implement robust quality control standards for vendors, for franchisee operations and marketing will help franchisees deliver on the desired experience.

When communicated properly, quality control standards signal to franchisees that the franchisor is there to provide value whether in the form of back-office assistance, efficient and cost-effective supply lines, or otherwise. That often leads to greater franchisee buy-in, which results in franchisees becoming brand ambassadors and championing the system.

1851: How important is the information in Item 19?

Bayer: From a franchise sales perspective, it is incredibly important now. When I started drafting FDDs (then known as UFOCs), I would say that maybe 30% of disclosure documents contained an Item 19 financial performance representation. Franchisors were hesitant to include one out of concern that a representation could lead to a complaint.

Now, with more sophisticated buyers/franchisees coming into the marketplace and expecting to compare financial performance across brands, the concern is that without an Item 19 financial performance representation, a franchisor will be unable to compete for promising franchisees. In discussions with prospective franchisees, I get the sense that there is a negative inference being drawn if the franchisor does not provide an Item 19 financial performance representation.

1851: What is the single largest legal mistake brands make?

Bayer: I’m not sure if this constitutes the largest legal mistake a brand can make, but this is certainly one I frequently see brands make — franchisors need to ensure that their disclosure documents and their agreements are tailored to their business, their practices and their goals. Then, franchisors should review those documents periodically to ensure that they continue to do so.

Our litigation team has come across numerous instances where franchisors haven’t followed their own agreements or have arbitrarily enforced certain provisions some of the time. Diverging from these agreements or failing to uniformly handle common issues sends confusing messages to franchisees, which could weaken adherence to system standards. Depending on the circumstances, it can negatively impact a franchisor’s ability to enforce that contractual provision(s) in the future.

1851: How does Einbinder, Dunn, Dimitri & Bayer stand out as a franchise law firm?

Bayer: We are among the few firms that represent both franchisors and franchisees. To the benefit of our franchisor clients, we draw on our vast experience representing franchisees to have a strong understanding of what franchisees find important when determining which brand to enter, navigating the franchisor/franchisee relationship during the term of the franchise agreement and when exiting the system, either at the expiration of the agreement or its termination.

That information has proven to be incredibly valuable when drafting FDDs, guiding franchisors through changes in their system and determining which battles are worth fighting.

1851: What is the best business advice you have received in your career?

Bayer: As attorneys, our job is not limited to drafting an agreement or filing a complaint. We are counselors. We must devote time, energy and attention to learning each client’s business, goals, pain points and risk tolerance. Then, we must develop, tailor and implement strategies that deliver on those considerations, while also factoring the client’s legal budget.

The practice of law should not be transactional. If you, as the attorney, can invest in your clients in this way, business will have a way of finding you.

1851 Franchise’s Supplier Database connects franchisors and franchisees with top legal experts. If you need guidance on agreements, compliance or disputes, click here for more information.