How Spadea Lignana Law’s Monthly Subscription Model and Proprietary Software Creates Lasting Client Relationships

Tom Spadea, one of the firm’s founding partners, has a long and diverse history in the franchising industry. After a partnership in a non-franchised manufacturing and technology business that ultimately closed, Spadea found himself drawn to the franchising world as a franchise broker in the early 2000s. He then joined Rita’s Italian Ice, first as a salesperson and then as head of franchise sales and real estate. 

While at Rita’s, Spadea decided to pursue what had been a long term personal goal of becoming an attorney and enrolled part time in the night program at Temple University’s Beasley School of Law while selling franchises during the day. His best friend from high school, Josh Lignana, independently decided to enroll in law school at Rutgers University during the same time after looking for a career change as well.  The two of them began to contemplate starting a franchise law firm together after they graduated. The idea of Spadea Lignana was born and soon after they both started practicing law they opened their first office in Philadelphia on January 1, 2012. 

“During my time at Rita’s and some other well-known national brands as a franchise development executive, I joined the IFA, became a Certified Franchise Executive (CFE) and did some franchise development consulting work,” said Spadea. “After the 2008 crash, I finished up my law degree and started practicing law full-time with a focus on franchising. In the beginning, after Josh and I teamed up, we handled mostly franchisee work. We negotiated leases, did some FDD reviews and helped people get out of bad situations. After a few years, we slowly started to build our team of attorneys with deep franchise and business experience. That slow strategic growth culminated last year, when we teamed up with our friend and industry veteran Harold Kestenbaum through the acquisition of his legendary practice. In an exciting move for all of us, we  doubled the size of our firm and now represent over 250 franchisors. Today, Spadea Lignana has over 20 team members in Philadelphia and New York. Franchising is all we do.”

A Unique Industry Perspective

Before becoming attorneys, Tom Spadea and Josh Lignana were both business consumers of legal services. They always had a feeling they could do it better. They observed a lot of unnecessary friction in the attorney-client relationship, and founded Spadea Lignana with the goal of making the process as streamlined as possible. “We are business people who have been in the trenches. I’ve paid my bills by selling franchises and not many franchise lawyers, if any, can really say that,” said Spadea.

Unlike other franchise law firms, Spadea Lignana takes a balanced approach and won’t shy away from representing franchisees. By knowing both sides, Spadea Lignana is better able to help clients navigate difficult issues. The firm has a deep understanding of the relationship dynamics that underpin all franchise systems. Many of their partners have held senior leadership positions for national franchise brands and some were franchisees themselves. That experience has proven invaluable in advocating on behalf of clients and keeping their long-term interest in the forefront of their advice. 

Prioritizing the Entire Life Cycle of the Franchise System

Spadea Lignana starts by asking why the franchisor started franchising and what their long-term goal is. “Most people become franchisors for the sometimes once in a lifetime opportunity to build generational wealth for themselves and their family,” said Spadea. “It is a long-term game, and it is hard work. If you only want to double or triple your income, don’t bother with franchising. But if you want the shot to multiply your income and net worth by 50 or 100 times, then franchising is a great path. Our firm thinks long-term, builds the foundation and ensures that business owners are ready for the franchise journey.”

Spadea Lignana’s CORE program for franchisors is a cost-effective and practical solution for the ongoing legal needs of franchisors, including, but not limited to, FDD updates, state registrations and franchise agreement executions. Through its proprietary cloud-based system Spadea Lignana can effectively and efficiently manage FDDs and franchise agreement executions for fair flat monthly fee. By thinking deeply about the endgame, Spadea Lignana ensures that when the franchisor sells to private equity in  7 to 10 years, all franchise agreements, state registrations, legal correspondence, trademarks and more will be in one place ready for a rigorous due diligence dive by their prospective suitors. The foundation for the future deal room is built from day one, so when the time comes to harvest the business everyone is not scrambling to put together documents and fill in missing pieces. 

The Advantages of Fixed Monthly Fees

The firm’s subscription model and flat monthly fee is another major differentiator. “With our fixed monthly fee, clients don’t have to worry about being billed for small talk and don’t have to rush through calls,” said Spadea. “The client relationships become so much stronger, which is the basis of our culture and the foundation of both our success and our client’s success. If a franchisor is afraid to call their lawyer because of hourly fees, then they don’t really have a lawyer. When we take away the hourly fee, we are able to align our interests and become an efficient, long-term partner in their success.”

During COVID-19, Spadea notes that he and his partners spent hours on the phone as clients talked through some very dark and scary moments. “The good thing about those calls — nobody got a bill,” he said. “We asked ourselves the same thing we asked franchisors: What are clients going to say about us when the pandemic is over? Lawyers always think clients are going to take advantage of them if they charge flat fees, but in my experience it just isn’t true and it shows a lack of trust on behalf of the lawyer. Some lawyers take themselves too seriously, we aren’t that interesting and clients don’t want to talk to us everyday.  And of course, sometimes a growing franchisor’s cashflow doesn’t catch up to growth, and we try to be sensitive to that as a fact of the industry and support them even if they fall behind.  After all, we also want to team up with the growing brands, so if that means we share a bit of the risk we look at it as an investment in the relationship and think it is the key to why we have solid long term relationships with our clients.”

Proprietary Technology and a Revolutionary Map System

In 2017, the firm launched an innovative, cloud-based proprietary map system after Spadea saw an election night graphic in which all of the states were the same size and divided into two simple categories: red or blue. A lightbulb went off in his head — that would be a great way for franchisors to show where they could sell and where they couldn’t. 

“There are a lot of good software platforms, but franchisors are leaving it up to franchise sales people to update the information, and as a recovering franchise sales person myself, I know they won’t always get it right because that is not their primary job or how they are judged or compensated,” said Spadea. “I realized that if we showed maps that were either red or green in terms of up to date state registrations, it would be much more efficient, simple and would be one single version of the truth. We worked with a good friend of mine who is a very experienced software programmer to create a web-based platform that we could manage internally. The platform not only gives up to date state registration information, but it allows the candidate to  download and sign for the FDD through the platform specific to the state in question.” 

This software doesn't just separate Spadea Lignana from other law firms, but from most IT systems in franchising as well. “We have an experienced franchise attorney responsible for managing the back end portal to determine which state is red or green and which document will be delivered to the candidate,” said Spadea. “We become the compliance team for our franchisors without slowing down the process. I ran franchise sales and understand that time kills deals. If we can take the friction out of a sale while ensuring all the t’s are crossed and the i’s are dotted it will help our clients grow in a sustainable way quickly.”

Meaningful and Long Lasting Client Relationships

In addition to innovation, Spadea Lignana differentiates itself by offering unlimited strategic advice and personalized attention to each client. “We have an incentive to be efficient based on how we charge our clients. Long term, if our clients grow, we grow with them,” said Spadea. “We are extremely proud of our long-term client relationships and how they view us as an integral part of their team.”

Spadea Lignana’s ideal client is any franchisor with under 100 units looking to grow.  “It takes a few years to get a concept off the ground and those first few years shouldn’t be rushed,” said Spadea. “In my experience, emerging concepts tend to be underserved or overserved by their law firms. Some have never used a lawyer or used a non-franchise lawyer and the system is built on a very shaky foundation while others may have law firms giving them pre-canned advice meant for systems with thousands of units. The big firms will shove complicated documents at clients with no real sense of processes, procedures or training on how the documents should be implemented in the real world. Some of these mega firms make their clients spend too much on their FDD updates, state registrations and each executed franchise agreement. After all, if the firm typically deals with huge corporate clients their internal metrics judge how many hours get billed, where our internal metrics are how successful our clients are year after year. We are the happy medium between the extremes.  We fill the niche by giving solid legal advice that takes into account the unique circumstances of each and every client, what their goals are and within a reasonable budget an emerging brand can afford.” 

Overall, Spadea Lignana helps bring to life the vision that franchisors have for their brand. “All of our clients have come from word-of-mouth referrals or through our organic online reviews. We’ve never really spent a lot of money or put a lot of effort into traditional marketing,” said Spadea. “It’s a validation of how meaningful our relationships are with clients and something we are very proud of. We are excited to continue to act as a legal resource and architect of franchise systems that can handle exponential growth. We can be a great resource for an entrepreneur that is shooting for the moon.”

For more information on Spadea Lignana, visit: https://www.spadealaw.com/