As part of its annual Franchise Legal Players issue, 1851 profiled the top franchise attorneys in the field to shine a spotlight on the work they do for the franchise industry.
1851: Tell us about your background and your firm.
Lee Plave, Partner at PlaveKoch: In early 1989, Dave Koch and I found ourselves in neighboring associate offices at a mid-size Washington, D.C. law firm specializing in franchising. Here, we both learned the ins and outs of private law practice and the business of franchising, becoming close friends and peers. In 2007, I broke off from my existing firm and started PlaveKoch with Dave. We just celebrated our 12th anniversary as a firm.
We do the exact same thing at PlaveKoch that we were doing at our larger firm, but we do it in a more relaxed environment. We don’t focus on monetizing every waking moment of our life. Instead, we put together a world-class team of 11 lawyers and formed a pleasant environment where we don’t take ourselves seriously, but we take work seriously.
1851: What are some of the must-ask questions when franchisors and franchisees are vetting potential franchise attorneys?
Plave: Franchise law is a highly specialized area, so it’s important to find someone that is a full-time practitioner in this area and doesn’t just dabble in it. I would look to see what their peers think of them. Peer review is the hardest thing to find, but the most likely to yield an answer. Ratings that come from popularity contents are not necessarily helpful. How many times have their peers invited them to speak at scholarly places or write in journals? Do their peers respect and want to hear what they say? How many times have they been invited to speak at ADA or at the IFA Legal Symposium? The more the better. This indicates that their own peers think highly enough of their work and intellectual capability.
1851: In broad terms, do you have a particular case that stands out to you as an industry learning experience?
Plave: I recently did an annual legal update at the ABA where I examined roughly 1,000 cases. The biggest lesson I drew from this was that franchisors should be as clear and unambiguous as possible. This will not only be more respected by courts, but will avoid disputes in the first place.
1851: What is the most rewarding aspect of your work?
Plave: You’re working with highly entrepreneurial people. If that doesn’t get you jazzed and excited to get up in the morning, then you’re missing the boat. We work with a large number of people that do the same thing, and every single one of them is passionate and working their tails off to get it right. The “can do” and entrepreneurial spirit is the most rewarding thing you can find.
1851: What are your top concerns for the franchise industry in the next year?
Plave: The new revenue recognition rules are one of the most important things on the horizon. The rules went into effect for private companies and take effect in the current fiscal year. This will make a difference in how companies take revenue in because they do not have the ability to recognize revenue in the year that it is received in.
Another thing that will continue to be a consideration is the increased use of data. You have to be vigilant about data. You don’t want to miss the chance to collect data to stay current - to get to know who your clients are and who your customers are and how to reach them. But, with more data comes a bigger risk for a data breach. This is the kind of nightmare franchisors want to avoid.
1851: What are you most optimistic about in the franchise industry next year?
Plave: Innovation is continuing to grow. People are trying out new ideas and there is no end to this experimentation. More people are looking to use the model of franchising in industries that go well beyond foodservice and hospitality. There is more excitement than ever to take advantage of the opportunity to have ownership at the franchisee level.
