As a franchise consultant for over thirty years, approximately fifteen percent of my professional practice time has been devoted to serving as a litigation consultant and expert witness in complex disputes, both in the United States and internationally. While the subject matter of these disputes varies, the role of a litigation expert is remarkably consistent – and often misunderstood.
At its core, the role of a litigation expert is to educate the trier of fact. As an expert my responsibility is to explain industry customs, standards, practices, and commercial realities, and to apply specialized experience to the factual record of the dispute.
- Importantly, this role does not include offering legal conclusions, interpreting statutes, or arguing what the law requires. Those responsibilities rest squarely with legal counsel.
- An effective litigation expert provides context – helping a court or arbitrator understand what is customary, reasonable, or typical within a given industry – not what the outcome of the case should be.
By the time an expert is retained, the litigants’ positions have usually hardened. The dispute resolution mechanism – litigation or arbitration – has already been triggered, and counsel has developed its legal strategy. At this stage, the expert’s function is not to manufacture opinions to fit a narrative, but to explain and contextualize the facts, serving as a translator between the realities of the business and the legal forum in which the dispute is being resolved.
Litigation experts are not advocates. Demonstrative advocacy, however subtle, erodes credibility and diminishes usefulness. Unfortunately, I have witnessed well-qualified experts sometimes fail to respect this boundary and, in doing so, compromise both their testimony and the party that retained them. This distinction is particularly important in franchising:
- Courts and arbitrators – sometimes including those with prior franchise law experience – often struggle to fully appreciate how franchising actually functions in practice.
- Franchising is a contractual relationship; it is also an operating system that blends economics, governance, culture, incentives, and risk allocation across decentralized businesses, with different ownership interests and obligations.
- Explaining how a particular franchisor operates within its industry, and how the conduct at issue aligns – or fails to align – with generally accepted franchising standards and practices, is where a credible franchise litigation expert adds value.
In franchise disputes, experts are frequently called upon to explain how the actions of franchisors and franchisees compare to established norms across comparable systems. The objective is not theoretical or academic. It is designed to help decision-makers understand the commercial reality of the marketplace, rather than an abstract or idealized version of franchising. The expert’s role is contextual, not prescriptive; explanatory, not argumentative. Lawyers who also serve as experts sometimes struggle with this transition, particularly when advocacy instincts carry over into expert testimony.
The franchise legal community is relatively small, and the pool of experienced and qualified franchise litigation experts even smaller. It is not uncommon for counsel to depose an expert in one matter, and defend a deposition of that same expert in another. Facts matter, and litigation experts in franchising should be agnostic to the side they are engaged by since that should be irrelevant to their opinions.
In this environment, credibility is an expert’s most valuable asset – and the easiest to lose. Experts who appear outcome-driven, overly aggressive, financially dependent, or inconsistent in their opinions undermine their own effectiveness. Today it is remarkably easy to impeach an expert by pointing to contradictory positions taken in prior testimony, reports, lectures, or published writings.
Effective litigation experts maintain independence. Their opinions are grounded in experience and industry practice, not in the needs of the party writing the check. They do not customize conclusions to fit a desired outcome, and they understand that restraint often enhances, rather than weakens, persuasive impact. They also understand that the courtroom demands clarity and an avoidance of emotion that can occur because litigation and arbitration by their nature can be emotionally charged settings.
Understanding What Drives Franchise Litigation
Litigation between a franchisor and a franchisee does not begin with the filing of the complaint. It begins with daily decision making, communication choices, cultural signals, leadership priorities, support, and compliance. Litigation is what remains when those systems fail. Prevention, by contrast, requires discipline – thoughtful governance, sound economics, cultural alignment, and ongoing engagement across the franchise system, from both franchisor and franchisee.
Litigation between a franchisor and franchisee is often foreseeable and avoidable and in my experience, rarely driven solely by the law. When franchisor leadership treats disputes as isolated legal events – or waits for counsel to explain why they are being sued – there are usually deeper system-level issues at play. Most often, it is the manifestation of unresolved operational, cultural, and economic tensions that have been allowed to fester. Franchisors that view the franchise agreements as a management tool, in my experience, increase the risk that litigation will occur – especially when system changes are anticipated or taking place.
Litigation prevention should be viewed as a leadership discipline, not a task delegated to legal counsel. Governance, economics, culture, clarity of expectations, and engagement are management responsibilities. While lawyers play a critical role in managing disputes after they arise, relying on legal counsel as the first line of defense is neither efficient nor effective.
Franchise systems share common structural vulnerabilities: decentralized operations, diverse operators, contractual boundaries, differing ownership interests, and the need to manage change across an entire network. When those challenges are compounded by technology shifts and regulators who may understand the law but not the business realities of franchising, risk increases for both franchisors and franchisees. These risks are best addressed before a dispute reaches a courtroom or arbitration panel.
Frequently when living through the disruption and cost of litigation, it becomes clear that the litigation may have been avoidable if litigation experts had been part of the team the franchisor routinely relies upon. It is for this reason we recommend to our clients that their core documents, including disclosures, agreements and manuals, be reviewed by litigation counsel and litigation experts before they are employed in the system. While this review should be done annually, it is especially important when material changes are anticipated or taking place.
Courts and arbitrators do not expect perfection. They look instead for evidence of good faith, reasoned decision-making, and proportional responses to conflict. Recent developments across franchising and the broader commercial landscape – technology adoption, software mandates, the integration of artificial intelligence, regulatory expansion, and rising system costs and fees – underscore how litigation risk continues to evolve. Not all of these risks are franchise-specific, but all of them affect franchise relationships. For example, while the American Franchise Act, if passed by Congress, will help to define the relationship, do not be lulled into a belief that it will eliminate the risk of joint employment.
The Most Effective Litigation Strategy
For franchisors, franchisees, and their advisors, the lesson is clear: litigation risk should not be managed reactively, nor delegated solely to legal counsel after a dispute has already taken shape. It must be addressed earlier – through disciplined leadership, informed governance, and a clear understanding of how franchising actually operates in practice. Franchisors that invest in understanding industry standards, align their systems with commercial reality, and address emerging risks before they harden into conflict are far better positioned to preserve enterprise value, protect relationships, and avoid the costly consequences of litigation. The most effective litigation strategy in franchising remains the one that never has to be deployed.
For franchise organizations evaluating these issues, working with experienced advisors such as MSA Worldwide – who bring deep perspective on franchising operations, governance, and litigation support – can provide valuable insight in assessing risk and strengthening system-wide practices.
Michael Seid is Managing Director of MSA Worldwide. You can reach him at mseid@msaworldwide.com or (860) 523-4257.
