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Seven Attorneys from Dady & Gardner, P.A. are Recognized in The Best Lawyers America© 2021 Edition

We are pleased to announce that seven partners at Dady & Gardner, P.A. have been recognized in The Best Lawyers in America© 2021 Edition as among the best franchise lawyers in America.


The attorneys who have been selected by their peers, along with the years they’ve received this designation include J. Michael Dady(26), Ronald K. Gardner(15), Scott E. Korzenowski(12), Jeffery S. Haff(11), John D. Holland(9), Kristy L. Miamen(5), and J. Mark Dady(2).

Dady & Gardner, P.A., limits its practice to helping franchisees and dealers preserve and enhance the value of their businesses as effectively and as efficiently as possible. The firm of franchise lawyers practices nationwide and delivers the highest quality representation available. Dady & Gardner’s franchise attorneys have represented a wide array of clients, from quick-service restaurant franchisees to farm and industrial equipment distributors, and have successfully resolved disputes against more than 350 different franchise and supply systems.


The Best Lawyers in America recognition serves as a testament to the highly regarded legal expertise and talent of our attorneys, and their commitment to representing franchisees. Best Lawyers® is respected for implementing an exhaustive peer-review evaluation that upholds integrity, expertise, peer opinions, and professional capabilities in determining which of the top 6% elite attorneys are included in this annual publication.


Best Lawyers in America provides an unbiased and reliable source of legal referrals that is trusted in the legal profession, media, and public worldwide. Attorney’s and Lawfirms are not allowed or required to pay for a place on this publication


If you would like to speak with one of our franchise attorneys to see how we can help you with your franchise dispute, contact us by phone at (612) 359-9000, email at contact@dadygardner.com, or by visiting us at www.dadygardner.com.

Best Lawyers Award Badge

Ron Gardner Weighs In on Vendor Rebates in Restaurant Business Magazine

Jonathan Maze, of Restaurant Business Online, talks with industry experts like Ron Gardner, in his most recent article: Recent disputes highlight franchisors’ use of vendor rebates: most franchisors receive such funds to run their supply chain, but franchisees often push back as their prices increase.

Dady & Gardner, P.A. attorney Ron Gardner, talks about how franchisees understand the franchisor needs to make money, but are concerned about the franchisor making so much money that the franchisees’ final costs becoming prohibitive.

“As long as the franchisee pays less than the market, then the franchise is using their buying power, I don’t think franchisees would complain,” Gardner said. “It’s when they’re worse off” that they have problems.

Read the entire article here.


*NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post, or if you would like to speak to one of the attorneys at Dady & Gardner, P.A. please email us at contact@dadygardner.com, or call us at (612) 359-9000.

Being a Franchisee in the Age of Pandemic

In his March 27, 2020, Franchising column, Ronald Gardner offers proactive steps franchisee representatives should be taking during this “sea change” caused by the COVID-19 pandemic.

The original plan was to write a column about Item 19 of the FDD, and how to interpret this most critical item, and how to maximize getting good information when looking to buy a franchise. But like all other plans for the month, this one needed to be changed in response to the COVID-19 pandemic.

While no one really knows when or how long the virus will be ravaging the planet, or how long it will take for things to get back to “normal,” as of this writing what we do know is that the market is a bear, there is no Madness, and the Green Jacket will be awarded at a later date. In other words, the world we lived in three weeks ago has changed dramatically—and for the foreseeable future.

This sea change will be a challenge for everyone. And as the foot soldiers on the frontlines of our consumer-driven economy, franchisees in certain industries are feeling this impact swiftly and severely. Initially, we will continue to see franchisees in the hospitality business suffer a significant downturn, as meetings, conferences, and vacations are postponed or canceled. Restaurants are also suffering a significant downward shift in demand, which is likely to continue over the coming period. From there, depending on the business of the franchisee, we will likely see continued deterioration of all businesses where direct customer interaction is required (e.g., car repair, gyms and fitness centers, specialty stores, etc.). In short, it’s going to be a rough ride.

Read the entire article in the New York Law Journal on what proactive steps franchisee representatives should be taking.


*NOTICE: This article is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this article.

Vendor Rebates: Franchising’s Dirty Little Secret

In my previous column, I introduced readers to the often shockingly one-sided and overly aggressive nature of a vast number of franchise agreements. Ronald K. Gardner, Franchising From the Franchisee Lawyer Perspective, Law.com (Sept. 27, 2019). In my next few columns, I want to explore the “undisclosed” or less obvious issues that exist in franchising. And while there are many places I could start, none is more critical, or more often abused, than vendor rebates.

For the uninitiated, a vendor rebate is exactly what it sounds like—i.e., a payment by a vendor based on purchases made from that vendor. Most frequently, this payment is made to someone in compensation for bringing volume purchases or exclusivity (or both) to the vendor. In essence, in exchange for meeting certain criteria, the vendor shares its profit with the customer to incentivize continued or higher volume business.

The Purpose of Uniformity

One of the putative benefits of franchising is uniformity. Customers learn to expect the same type of products and services from one location to the next, and through this type of uniformity, franchise systems can build loyalty and goodwill associated with…read more


*NOTICE: This article is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this article.

Franchising From the Franchisee Lawyer Perspective

Imagine a client walks into your office wanting to get out of a contractual arrangement that they entered into three years ago. They explain that they are losing money, and that the contract makes no sense for them any longer.

In probing them, and reading the contract, you learn your client’s business is essentially controlled by the other party. The contract dictates the most basic aspects of the business—the hours of operation and the training requirements of the employees. It gives the other party approval rights over who the manager will be; the layout and appearance of the location; and controls what products and services your client can sell. Digging further you find that your client had to buy all of the original FF&E from the other party, and once open, is required to continue buying all inventory from the other party and its wholly owned affiliates, all at prices that are above what your client could get on the street for the exact same products. And, beyond controlling the price of goods (by being the only seller of those goods your client is allowed to purchase from), the contract also allows the other party to control the retail price of the goods and services your client may offer as well. In sum, your client has little to no control of their own profit margin.

The financial terms surprise you. Your client paid $75,000 to be in this one-sided relationship, and continues to pay 8 percent of their gross revenue to stay in the relationship, irrespective of whether they are making any money.

The boilerplate terms are no better. Your client is required to indemnify the other party for anything that happens at the location, even if it is the fault of the other party (and the indemnification is not reciprocal). The contract expressly disclaims any obligation the other party has to act in good faith. The dispute resolution provisions give the other party the right to bring injunctions, but your client does not have that right. Your client’s right to bring a claim is subject to a one-year statute of limitations, but there are no such limits on the other side. Venue and choice of law both favor the other party. And the attorney fee provision is also unilateral; the other party can get theirs if they win, but your client has no such stated right.

Finally, getting to the reason your client came in, you turn to the termination provisions. The agreement, which is for a 20-year term, while allowing the other side to terminate, inexplicably gives your client no right to terminate for any reason. And, if your client “breaches” by terminating because…read more


*NOTICE: This article is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this article.

J. Michael Dady Discusses The Legal Side of Franchising With Minnesota Business Magazine

J. Michael Dady Discusses The Legal Side of Franchising With Minnesota Business Magazine

Dady & Gardner founder J. Michael Dady recently sat down with Minnesota Business Magazine to discuss the fine art of fine print in franchise law.

“Buying a franchise is way less complicated than starting your own business from scratch, right? You just find a successful concept, slap your signature on a boilerplate contract and start printing money.

Well…no. That’s not how it works.

Franchises fail less frequently than novel concepts, so they’re “safer” in that sense. That doesn’t mean they’re easy to run or manage. Legally speaking, buying and operating a franchise is more complex — and fraught with greater peril — than pursuing an original idea.”

Battle over the Franchisor Business Judgment Rule and the Path to Peace

Battle over the Franchisor Business Judgment Rule and the Path to Peace

Brian B. Schnell and Ronald K. Gardner, Jr.

Brian Schnell

In successful franchise systems, both the franchisor and the franchisees obsess over the franchisees’ bottom line. Healthy franchise systems also see the franchisor properly balancing its own interests with the interests of the franchisees and the system as a whole. The franchisor’s role in growing, evolving, and protecting the brand and system is key to this balancing act. If the franchisor fulfills its role, the franchise system is better able to compete effectively against competition, including other franchise systems and non-franchise businesses. But when courts are forced to evaluate the decisions the franchisor makes in attempting this balance, the question becomes by what standard should a franchisor’s decisions be judged?

In many instances, the implied covenant of good faith and fair dealing is used as the yardstick, particularly in cases where the dispute involves a franchisor’s discretionary decision. However, in recent years, many franchisors have started incorporating the business judgment rule into their franchise agreements. From the franchisee’s perspective, franchisors are using the business judgment rule as a “substitute” for the implied covenant. From the franchisor’s perspective, the business judgment rule is a standard for resolving whether a franchisor has acted reasonably and in good faith. This article sets out to explore whether the implied covenant, the business judgment rule, or some other standard is appropriate when the issue of franchisor discretion arises. The reader will find that while our analysis and preliminary conclusions, written from the point of view of both experienced franchisor and franchisee counsel, are polar opposites, our final conclusions are remarkably similar. Ronald Gardner

The franchise agreement is the key document that outlines the roles and responsibilities of the franchisor and franchisee. It also shapes how the franchise system responds to changes in the business environment and other competitive threats. No franchise system will be sustainable without effectively responding to customers’ ever-changing demands. In order to effectively implement change and maintain sustainability in the hearts, minds, and pocketbooks of customers, a franchisor must (1) focus on customer-centric initiatives and the bottom line of its franchisees; (2) instill in its franchisees an undying devotion to the brand so they have the same customer-centric focus; (3) empower its franchisees through collaboration on key strategic and customer-centric initiatives; and (4) create a strong franchise agreement that allows it to fulfill its role and responsibility to grow, protect, and evolve the franchise system and brand.

An important check on the misuse of authority in the franchise relationship has typically been the covenant of good faith and fair dealing. More specifically, within this context of system change or any other decision a franchisor makes, when a franchisee disagrees with the franchisor, the franchisee often raises a good faith and fair dealing claim. Good faith and fair dealing generally require that when a contract grants discretion to one party, that party is required to exercise that discretion in a fair and reasonable manner, consistent with the reasonable expectations of the parties.1

In recent years, however, franchisors have sought to replace or frame the good faith and fair dealing discretionary standard with a corporate law doctrine: the business judgment rule.2 By contractually replacing or defining good faith and fair dealing with the business judgment rule, a franchisor may exercise its discretion on the basis of its “reasonable business judgment.” Often, “reasonable business judgment” provisions also explicitly state that the franchisor meets the standard, even if other reasonable or arguably preferable alternatives are available, if the decision or action is intended to promote or benefit the system generally, even if it also promotes the franchisor’s financial or other individual interests.

Here is a typical business judgment rule provision that may be incorporated into a franchise agreement:

Our Reasonable Business Judgment. Whenever we reserve discretion in a particular area or where we agree to exercise our rights reasonably or in good faith, we will satisfy our obligations whenever we exercise reasonable business judgment in making our decision or exercising our rights. Our decisions or actions will be deemed to be the result of reasonable business judgment, even if other reasonable or even arguably preferable alternatives are available, if our decision or action is intended, in whole or significant part, to promote or benefit the franchise system generally, even if the decision or action also promotes our financial or other individual interest. Examples of items that will promote or benefit the franchise system include, without limitation, enhancing the value of the trademarks, improving customer service and satisfaction, improving product quality, improving uniformity, enhancing or encouraging modernization, and improving the competitive position of the franchise system.

The introduction of the “reasonable business judgment” standard of discretion into the franchise arena significantly impacts the franchisor/franchisee relationship. While franchisors have already introduced the “reasonable business judgment” standard into franchise agreements and discussion on the subject began over a decade ago,3 there is a notable dearth of case law discussing this particular standard of discretion in the franchise context.4

In light of the lack of case law on the subject and the seemingly increased use of the business judgment rule in franchise agreements, this article will provide perspective, from the standpoints of both franchisor and franchisee, on the appropriateness of the business judgment rule as a discretionary standard for franchisors as compared to the application of the covenant of good faith and fair dealing.

This article begins with a discussion of the development of the business judgment rule and proceeds to discuss the franchisor and the franchisee’s perspective as to its application in the franchise context. Finally, this article concludes with the authors’ shared conclusions that aim to benefit franchisors and franchisees alike.


2. The authors note that within the last few years a significant majority of the franchise agreements drafted by franchisor counsel or reviewed by franchisee counsel include some form of the business judgment rule.
3. See, e.g., Jeffrey C. Selman, Applying the Business Judgment Rule to the Franchise Relationship, 19 FRANCHISE L.J. 111 (2000).
4. The lack of case law is likely attributable, at least in part, to the prevalence and uniform enforcement of private arbitration agreements and settlements. To date, In re Sizzler Restaurants International, Inc., 225 B.R. 466, 474 (Bankr. C.D. Cal. 1998), is the most notable decision discussing the business judgment rule in the franchise context. See infra notes 50–53 and accompanying text for further discussion of the Sizzler decision.


Brian B. Schnell (brian.schnell@faegrebd.com) is a partner in the Minneapolis office of Faegre Baker Daniels LLP. Ronald K. Gardner, Jr. (rkgardner@dadygardner.com) is the managing partner of Dady & Gardner, P.A. in Minneapolis. The authors would like to express their thanks to Andrew Malzahn, an associate with Dady & Gardner.

Dady & Gardner, P.A., recognized as “Band 1” franchisee law firm by Chambers U.S.A

We are delighted to announce that our firm, Dady & Gardner, P.A., has once again been recognized as the only “Band 1” franchisee law firm in America by Chambers U.S.A.

“Band 1” represents the very best ranking available from Chambers U.S.A., which bases its rankings on its nationwide survey of franchise lawyers.  Our named partners, Michael Dady and Ron Gardner, have also been recognized, once again, as two of only three “Band 1” franchisee lawyers in the United States.  But our recognition doesn’t stop there.  Of the 14 franchisee lawyers recognized by Chambers U.S.A. this year, FIVE of them are here at Dady & Gardner, P.A.  No other firm has more than 2 recognized lawyers on the list!

Here is what Chambers U.S.A. has to say about our “Notable Practitioners.”

Michael Dady is a “strong advocate” who is always “extremely well prepared and knowledgeable” market sources say.  He has an excellent track record in the courtroom.

Ronald Gardner advises franchisees of all sizes on contractual negotiations and disputes.  Market sources say he is “an outstanding lawyer“.

Jeffery Haff is “practical,” “engaging” and “really understands the nitty gritty of arguments” sources say.  He represents franchisees, distributors and dealers nationwide on a range of cases.

Scott Korzenowski is respected for his knowledgeable representation of franchisees and dealers in litigation and arbitration proceedings.  Clients praise his responsiveness.

Kristy Miamen has a good and growing practice and is lauded by clients as “very detail-oriented and very well prepared.”  She represents franchisees, dealers and distributors in disputes with suppliers and franchisors.

We are proud to receive this ranking, but even more proud to serve our deserving franchisee and dealer clients.  It’s something we have done every day for over twenty years, and something we look forward to continue doing as far as the eye can see.

Chambers USA Top Ranked Lawyer Minnesota

Find us on Chambers USA