Top Franchise Legal Players: Alexander G. Tuneski, DLA Piper Partner
Tuneski shares his insights into how the legal landscape of the franchise industry has changed over the past year and what he predicts for the future.
Alexander Tuneski, partner with global law firm DLA Piper, concentrates his practice on representing franchisors domestically and internationally in a broad range of transactional and regulatory matters. Chambers USA has recognized Tuneski as one of the top franchise lawyers in the nation from 2018 to 2020, highlighting him as an "impressive" lawyer "for his adroit handling of a range of franchising matters." With lawyers in over 25 cities in the United States and over 40 countries, DLA Piper is uniquely positioned to help franchise clients with all of their legal needs around the world.
1851 Franchise: How did you end up specializing in franchise law? What drew you to the field?
Tuneski: I have always had an interest in restaurants and hospitality, and I loved the idea of working together with clients to help build their brands. While my initial interest focused on restaurants, my practice covers such a wide variety of industries that it never gets boring. On any given day, I may be working with restaurant, education, fitness or service concepts on a wide range of franchising, trademark, labor, privacy, real estate or M&A matters. There are few things more professionally rewarding than helping a franchise concept grow from a few units to a system of hundreds of successful franchisees, or helping a mature franchise system that has become stagnant to address issues that have been holding them back from growth.
1851 Franchise: What do you think is the biggest legal hurdle facing the franchising industry in 2021/2022?
Tuneski: It often can seem like franchising is under attack on a variety of regulatory fronts as the Department of Labor, National Labor Relations Board, Federal Trade Commission and state legislators and agencies change existing rules and look to implement new laws, regulations and enforcement policies that could negatively impact the franchise model.
On top of that, the franchise industry is still facing the unprecedented challenge of dealing with COVID-19. While the pandemic isn’t a legal issue per se, it is a black cloud over everything. The franchise industry largely persevered through the initial periods of the pandemic, but it benefited from significant governmental support and an overarching hope that things would get back to normal sooner than later. As they still aren’t quite normal, there may be a fallout where franchisors and franchisees that could survive a year or two of reduced revenue face a reality of potentially multiple years of reduced revenue with less assistance available. This means more franchisee defaults, more terminations, more supplier and landlord disputes, and, generally, more instability, as both franchisors and franchisees try to survive all of these challenges.
1851 Franchise: What is the most common mistake you see franchise brands making from a legal perspective?
Tuneski: Cutting corners is by far the biggest mistake. Way too many franchisors fail to make the necessary investments in building the proper foundation for their system, such as developing and implementing proper systems and support teams. On the legal side, some franchisors don’t invest in proper legal documentation, fail to develop in-house franchise administration teams and processes, and neglect to engage experts to help formulate proven policies and procedures. While this may work in the short term, it often comes back to haunt franchisors and franchisees become disgruntled, lawsuits arise or potential investors pull back the curtains and do their due diligence. By saving a dollar today, they often end up losing millions down the line.
1851 Franchise: What do you love about working with franchises?
Tuneski: What isn’t to love? You get to work with amazing brands and watch them grow from a concept to a household name, while also getting to work with creative and smart entrepreneurs every step of the way. It’s fun to see your client’s restaurants, gyms and trucks pop up and know that you played a small part in making that happen.
1851 Franchise: What is one thing you think every prospective franchisee should know before joining a franchise brand?
Tuneski: With all of the benefits of joining a brand, from name recognition to proven systems and support, it is important to remember that you are agreeing to give up some of your entrepreneurial independence in order to follow the rules and procedures specified by the franchisor. Uniformity is at the core of franchising, and while there is always room for new ideas and some areas where franchisees are free to develop their own policies and procedures, franchisees ultimately are expected to implement existing franchise systems. Franchisees who don’t appreciate this often run into problems ranging from operating lower-performing units to tension and conflicts with their franchisor. On the other hand, franchisees that understand this typically find that the benefits of staying within the lines typically far outweigh the risks and challenges of developing their own brand and systems.