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August 2013

ABA Franchise Law Journal Publishes Article by Gordon & Rees’s Ronald Giller, Lisa Garner and Adam Sheps

Gordon & Rees New Jersey office managing partner Ronald Giller and Los Angeles partner Lisa Garner co-authored an article published in the Summer 2013 issue of the American Bar Association’s Franchise Law Journal.

In the article, titled “Yours, Mine, Ours, and Theirs: The Role of Spousal Guaranties and Consents in the Franchise Relationship,” Giller, Garner and Sheps analyze how a spousal guaranty or consent may serve to protect the interests of not only the franchisor and the franchisee, but the franchisee’s spouse as well.

The article explores how different states’ marital laws affect the franchise relationship and how a spousal guaranty or consent could be effective to delineate clearly how a franchise should be dealt with in the event of a change to the marital relationship.

Also highlighted in the article is the dual objective met by the execution of a spousal consent. First, a franchisor can delineate what portions of and how the franchise agreement will be enforced against the nonfranchisee spouse. This distinction reduces the uncertainty as to whether courts will enforce the franchise agreement against the nonfranchisee spouse and ensures that the franchisee and the nonfranchisee spouse are not able to circumvent the franchise agreement.

Second, a consent allows the franchisee and his or her spouse the opportunity to designate how the franchise will be treated in the event of death or divorce, again removing uncertainty. Through a spousal consent, control over the manner in which a franchise is distributed is in the hands of the franchisee and his or her spouse, not the courts.

The article concludes that “the ultimate goal of any guaranty or consent is for [all of] the parties involved to have a mechanism to protect the fruits of the franchise agreement into which they have entered.”

To view the full article, please click here.

Lisa K. Garner
Ronald A. Giller



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