Top Franchise Legal Players: Joyce Mazero, Polsinelli Co-Chair of the Global Franchise and Supply Network Group
Mazero spoke with 1851 Franchise to discuss her story, her predictions for the future of the franchising industry and more.
Joyce Mazero, co-chair of Polsinelli’s global franchise and supply network group, is a renowned and trusted franchise attorney with more than three decades of experience. With her in-depth expertise in litigation and business transactions, Mazero works to maximize competitive advantages in supply chains, leverage international relationships to increase client capital and expand opportunities and foster value among franchisors, franchisees and suppliers. She has helped franchise brands of all sizes across various industries and is recognized as one of the top leaders in franchise law.
1851 Franchise: How did you end up specializing in franchise law? What drew you to the field?
Joyce Mazero: Whether working on behalf of franchisors or franchisees, franchising permits a lawyer to act as a “general counsel,” providing advice and counsel on all aspects of business law and litigation, including corporate, intellectual property, bankruptcy and commercial contracting matters. I enjoy the diversity of the problems and the fact that the relationship with franchise clients is normally long-lived, allowing lawyers to counsel franchise companies at various important stages of their life cycle.
1851: What do you think is the biggest legal hurdle facing the franchising industry in 2021/2022?
Mazero: Federal and state attacks on the franchise model are seeking to characterize the franchise relationship as one of employment (especially those in which the franchisee also depends on independent contractor relationships), which often makes it challenging to advise emerging and mature franchise companies. The potential future impact of such cases and legislation is to have the franchise relationship characterized as an employment relationship, which would turn the franchise relationship on its proverbial legal and economic head.
Similarly, certain actions by franchisors to provide more effective services to franchisees and their employees may subject the franchisor to being treated as a ”joint employer” with its franchisee. This has resulted in many franchisors scaling back or restructuring services (often by contracting third parties to provide such services) that could be valuable to all franchisees.
On another note, the supply chains of many franchise systems have been disrupted, especially in those cases where the franchisor depends on single or limited sources of supply. Franchise systems will need to make changes to increase resiliency in their supply chains rather than be reliant on price and on-demand purchasing strategies, which as a result of COVID-19, have left many franchise systems seeking alternative suppliers and bringing manufacturing and supply sources closer to them and their customers.
1851: What is the most common mistake you see franchise brands making from a legal perspective?
Mazero: Brands often find themselves in a dilemma over how to manage disputes with franchisees. Some franchisors stand firm on points that should be compromised or agreed upon with franchisees for the good of the relationship and the franchise system, while at the same time those same franchisors will compromise on points that are of fundamental importance to the integrity of the franchise system. Being able to determine what “wars” to fight fosters respect among franchisees who will admire a franchisor that knows the difference.
1851: What do you love about working with franchises?
Mazero: The variety of issues. One day I can be working on the sale of franchised business, the next a bankruptcy matter, and on another day I could be focused on supply contract disputes or on an FCPA investigation. The diversity of needs among franchisors and franchisees make it necessary to stay current on many areas of the law, and I enjoy the challenge.
1851: What is one thing you think every prospective franchisee should know before joining a franchise brand?
Mazero: A benchmark of almost every franchisee relationship is initial denial of any negative findings about the franchise opportunity and, notwithstanding such “red flags,” the franchisees’ desire to “trust” the franchisor. One hopes that that ultimate franchise relationship will be based on earned trust, but this does not negate the responsibility of the franchisee to investigate and objectively analyze information about the franchise opportunity.
In particular, franchisees need to look beyond the information in the franchise disclosure document by obtaining information about the performance of the franchise from other franchisees and the underlying data that substantiates any financial performance representation. Prospective franchisees also need to understand whether owners are unable to find sites, are selling off their businesses or terminating the franchise in noticeable numbers. It is also important to understand to what degree the franchisor relies on revenue from being the supplier of critical items to the franchisee, takes an uncompetitive margin on goods or is dependent on sole suppliers.