Litigation partner William Sentell and Corporate special counsel Jill Klein examined the thin line franchisors must walk when using franchisee questionnaires in an article they wrote for The Franchise Lawyer. While franchisee questionnaires, which are presented to prospective franchisees during the franchise sale process, can be a legitimate source of information for franchisors, they can also leave franchisees in a difficult position in the event of future litigation. This has led some state and federal regulators to take a closer look at the questionnaires. Sentell and Klein provide an overview of the issue, and argue that, when used properly, the questionnaires can benefit franchise stakeholders by promoting greater transparency and certainty.
“Franchisee questionnaires will continue to generate ongoing scrutiny by regulators and courts,” Sentell and Klein write in their article. “Franchisors that use them should deploy them in a way that demonstrates utmost good faith and avoids any actions that may lead one to view the questionnaires as strategic devices meant to gain a future litigation advantage.”