In this episode of the “Emerging Franchise Brands” podcast, host Frank Fiume engages with Harold Kestenbaum, a seasoned franchise attorney with over four decades of experience. Kestenbaum’s journey into franchising began unexpectedly when he was tasked with learning about the industry for a small Manhattan law firm. This marked the start of a fascinating career that would see him evolve into a key figure in the franchising world.
Kestenbaum highlights that franchising has always been about unit economics, a fundamental that remains unchanged despite the industry’s evolution. He points out the dramatic shift in franchise marketing due to social media, which has replaced traditional avenues like print media and trade shows.
A significant portion of the discussion revolves around the legal aspects of franchising. Kestenbaum emphasizes the regulated nature of the industry, governed by federal laws and varying state regulations. He shares anecdotes about founders inadvertently entering into franchising and the pitfalls of misinterpreting franchise laws.
Furthermore, Kestenbaum delves into the intricacies of the Franchise Disclosure Document (FDD), a crucial legal requirement for franchising. He advises on the importance of including potential future fees in the FDD and the necessity of updating it regularly.
The conversation also touches on the challenges posed by social media in franchising, particularly its boundary-less nature which can lead to inadvertent legal breaches in unregistered states. Kestenbaum underscores the need for franchisors to be cautious about what they communicate on social platforms.
Throughout the podcast, Kestenbaum offers valuable insights for both emerging and established franchisors. He stresses the importance of patience, proper capitalization, and adherence to legal frameworks for long-term success in franchising. His expertise in franchise law shines through, making this episode a treasure trove of knowledge for anyone interested in the franchising industry.
February 21, 2024
