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<a href="https://www.linkedin.com/in/hkestenbaum/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=top-franchise-legal-players-harold-kestenbaum-spadea-lignana-2717253" target="_blank" rel="nofollow">Harold Kestenbaum</a> is, in his own words, “not a young guy anymore,” but he’s still making waves in the franchise industry as one of the most sought-after attorneys in the field. This helps explain why in 2019 Kestenbaum decided to merge his law practice, HLK P.C. Law Firm, with <a href="https://www.spadealaw.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=top-franchise-legal-players-harold-kestenbaum-spadea-lignana-2717253" target="_blank" rel="nofollow">Spadea Lignana</a>, an up-and-coming firm with “young blood.”“It’s been fantastic,” Kestenbaum said of the merger. “These are super-smart guys, and they are on the cutting edge, so we really have a lot to offer each other and our clients.”We spoke to Kestenbaum to learn more about his 40-plus years of experience in franchise law.<h4>1851 Franchise: How did you end up specializing in franchise law? What drew you to the field?</h4>Harold Kestenbaum: The third job I had out of law school was with a very small law firm in 1977. It was essentially just two guys, and I was the third. I didn’t know the first thing about franchising. They got a client that was a franchise company, but no one knew anything about franchising, so they told me to go learn everything I could learn about franchising. Google wasn’t around at that point, so I read every book I could get my hands on and went to every seminar I could find. I quickly came to love the industry. After a few years, I felt confident I knew more than anyone about the industry, so in the ‘80s, I struck out on my own as a franchise attorney.<h4>1851: What do you think is the biggest legal hurdle facing the franchising industry in 2021/2022?</h4>Kestenbaum: The answer to that question is one I never would have expected, until last year of course, and that’s COVID-19. It changed everything. It made franchises pivot in ways they are still trying to figure out. Food brands had to go quick-serve, take-out and delivery. That was a very tough transition for dine-in brands, if they were even able to survive. But those changes also cut down on labor and other costs. I have clients who did better in 2020 than ever before. But until we return to some semblance of normalcy after COVID, it’s going to be the biggest challenge facing just about everyone in the industry.The other good news is that, unlike with the Great Recession, there is a lot of money available, and interest rates are low. So funding for franchisees is readily available, and there are a lot fewer headaches in that regard. There’s also great real estate available because so many businesses shut down last year. So the pandemic does bring some benefits to the industry.<h4>1851: What is the most common mistake you see franchise brands making from a legal perspective?</h4>Kestenbaum: Too often, we see businesses roll out a franchise program before they are ready. That might mean they are not financially ready, or they don’t have the proper management in place, or in many cases they simply don’t have a proven operational model yet. I get people who call me and say, “I want to be a franchise,” but they have only been in business for two months. You have to be in business for a while so you can prove your model and work out any issues. If you haven’t been in business for at least six months to a year, you shouldn’t even think about franchising.<h4>1851: What do you love about working with franchises?</h4>Kestenbaum: I love working with entrepreneurs. I love working with business people. They get it. They are innovative. They are creative. For me, franchise law is much more exciting than other areas of law. That’s no knock on my colleagues with other specializations, but so many other areas of law are boring to me. Tax law is boring. Litigators like to litigate, but I’ve never been compelled by that kind of confrontation, so I don’t like to litigate.&nbsp;Also, I actually ran a franchise company back in the ‘80s, and I enjoyed it. So I love the environment. And I enjoy the interaction; the clients in this field are different from the clients my colleagues in other fields work with. I feel like I understand them.<h4>1851: What is one thing you think every prospective franchisee should know before joining a franchise brand?</h4>Kestenbaum: They need to hire a franchise lawyer and go through the brand’s FDD carefully. It’s critical to know everything about the franchise before signing on. If the brand has franchisees already, the prospect needs to call those franchisees and do their due diligence. I don’t work with franchisees directly, but that’s my advice: Do your homework.

Top Franchise Legal Players: Harold Kestenbaum, Spadea Lignana

1851 Franchise

The veteran franchise attorney tells 1851 why COVID-19 was a mixed bag for the franchise industry and what he thinks every prospective franchisee should know before signing on with a brand.

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