Top Franchise Lawyers: Craig Tractenberg of Fox Rothschild LLP

About Craig Tractenberg:

Craig Tractenberg is the co-chair of the Franchise and Distribution Practice Group at Fox Rothschild LLP. The Fox franchise team consists of 10 dedicated franchise lawyers and over 900 other lawyers representing the largest franchise companies, multiunit operators and emerging franchise brands. 

Tractenberg has been a litigator, an arbitrator and a law school adjunct professor. His practice involves domestic and international dispute resolution, transactions, registration and disclosure activities. Tractenberg works primarily out of Philadelphia with active cases across the United States and overseas.

About Fox Rothschild LLP (from firm’s website):

Fox Rothschild has grown to a 950-lawyer national law firm with 27 offices by focusing on client service and responsiveness, and by attracting bright and creative lawyers who know how to deliver.

 

In a word, by listening.

 

Listening to our clients. Listening to our lawyers.

 

We give our clients the focus and service of a boutique – with the reach and resources of a national firm.

 

We provide our lawyers with a national stage and equip them with the platform to nurture innovation and drive client success.

 

Individuals and businesses — public, private and nonprofit; startup, family-run and multinational — receive our unwavering commitment to client satisfaction.

1851 Franchise: What drew you to franchise law and what are some of the things you like about working in the field?

Craig Tractenberg: As a young lawyer, I started representing a large franchisor and noted that the founder, with over 1000 units, asked me to call him by his first name. His name was William Rosenberg, known as “Rosey,” and he started Dunkin’ Brands from a lunch truck. Rosenberg was also the first member of the International Franchise Association, and Ray Crock immediately joined him. Still, despite his massive success in franchising, Rosey never forgot where he came from and how much hard work he had put in. 

A few years later, a retired fireman and his roofer brother came to me to franchise a frozen dessert concept they had started on their front porch. Neither had graduated high school, but they could calculate the costs in their business quicker than any accountant. Together, they founded Rita’s Italian Ice, which now operates over 600 units in multiple countries. 

Another one of my clients was a son of deaf parents who went to work at McDonald’s at age 19, eventually saving enough money to buy a franchise. In fact, he was the first McDonald’s Corporation franchisee in Manhattan and owned many locations before asking me to help him with his exit strategy. 

Working with successful entrepreneurs like these keeps me enthusiastic. There are so many inspiring stores, and I admire all of these people for their success, their modesty and their emotional intelligence.

1851: What is something you think every franchisor should know about franchising from a legal perspective that they may not know already?

Tractenberg: Do not substitute the words on the page of a franchise agreement for the reality of the franchise relationship. Franchisees must assume that good faith and fair dealing will be a litmus test for the propriety of any conduct, even if the law does not require it. Franchisors should be sure they can articulate a good, brand-oriented reason for corporate action, even if it is solely within their own discretion. Overly opportunistic conduct on the franchisor’s part will ultimately be punished by the courts or by the marketplace.  

1851: Similarly, what is something you think every prospective franchisee should know about franchising before diving into the industry and why?

Tractenberg: Buying a franchise gives franchisees the advantage of being in business for themselves, but not by themselves. Still, franchise partners can be like entrepreneurs in handcuffs — not all systems are right for everyone. Franchisees should shop for a concept carefully and listen to their accountants and lawyers. Be business-minded at all times and learn everything about the franchise opportunity and relationship. Trust the franchisor but always verify.

1851: One of the hottest topics in franchising right now is the NLRB's joint employer ruling. What's your take?

Tractenberg: It is unbelievable that this important issue is determined by politicians. It is possible that we will have a national legislative initiative settle this issue once and for all, rather than patchwork state laws. Even with a uniform law, however, states might be able to impose higher standards than federal law requires.   

1851: What do you see as the biggest or most interesting topic in franchising over the next year and why?

Tractenberg: The most interesting topic in franchising right now is the need for privacy and data security, which we address with many of our clients. The GDPR, the CCPA and the New York and New Jersey initiatives will need to be sorted out and will cause sleepless nights if not dealt with immediately. 

Another big topic is the labor law issue because rising labor costs and increasing worker rights is a potent formula for unrest in the franchise environment. The answer to labor questions may be different for each franchisor — it is hard to know the right response. Doing nothing creates headline risk but taking control might expose franchisors to liability. This is where expert navigation with legal professionals can help.