Mackenzie Dimitri, a partner at New York-based Einbinder & Dunn, is a franchise attorney who splits her time between litigation and transactional work.
“My litigation is all different sorts of commercial business matters. But my transactional work typically stems from franchise issues. For instance, I cover a lot of regulatory work, due diligence related to franchise acquisitions, and represent clients who are buying or selling franchised businesses.”
Why franchise law?
Mackenzie’s niche focus on franchise law happened by chance – it was never planned. After graduating in law, she clerked for the New York Supreme Court’s Second Department Appellate Term and worked for a large firm in New York City doing complex commercial litigation. She was angling for a specialist area within commercial litigation when she came across Einbinder & Dunn. The partners at the firm introduced her to franchise law and Mackenzie quickly seized the opportunity.
“I fell into it actually,” Mackenzie laughs. “It’s a really interesting practice area. I was looking for a bit of a niche in the complex commercial litigation field. I wanted to find an area where I could become an expert and learn the law extremely well.”
“When I was looking at different firms, I found Einbinder & Dunn, and met the partners here. It was a great fit and they brought me into this world.”
Mackenzie soon realised the franchise bar and franchise law is a small, highly specialised world that can work for the benefit of clients: “It can be a big advantage for them if I’m hired in a litigation case. As it’s such a tiny field, I often know the attorney on the other side – maybe we worked on a paper together, or spoke at a conference, or were on a panel together.”
“If that’s the case, I can more informally reach out and say, ‘I represent this client; what can we do?’ It sort of lends itself to a collegial practice. I really appreciate that.”
Diverse mix of clients
Mackenzie’s clients are a rich mixture of the new and the old when it comes to franchising. “So we have franchisee clients who are new to the industry and they have one location in one city – or we have franchisees that have anywhere from five to 60 locations.”
“On the franchisor side, it’s the same thing: We represent startup franchisors that have a few successful corporate locations and are looking to use franchising as a way to expand. Meanwhile, existing, and large-scale franchisors use us as more of an outside general counsel on a variety of matters.”
Assisting startup franchisors
Working with startup franchisors is a particularly rewarding aspect of Mackenzie’s practice. These clients often require more handholding and guidance; they are new to the franchising industry and may not have a clear understanding of the legal and operational aspects involved. Mackenzie enjoys helping these clients set up systems and processes to protect themselves and their businesses. She educates them on the importance of documentation, audits, and compliance, ensuring that they have a solid foundation for success, and represents them if any disputes arise.
“Often, the smaller the client, the more work you have to put into helping them. But I really enjoy working with our startup clients. They’re a lot of fun; they’re excited, they’re learning new things. They can benefit a lot from working with our firm.”
“We can really help them to protect themselves and explain the law and why certain systems and processes are so important to ensure compliance. We use disputes that arise and problems as a major opportunity to help the franchisor learn how to level up their business practices. I was working with a newer franchisor recently who was having issues with franchisees challenging their fee structure. We realized that the fees that were disclosed were being properly charged, but the way the franchisor’s billing software was invoicing those fees was confusing. We were able to help the franchisor address that issue and repair its relationship with its franchisees.”
Litigation in franchise law
For Mackenzie, litigation is an inevitable part of franchise law, especially when disputes arise between franchisees and franchisors. Mackenzie handles a range of litigation cases including those related to default notices, contract enforcement, and shareholder disputes.
When representing franchisees in litigation, she helps them understand their rights and options when faced with a notice of default. On the franchisor side, she assists in enforcing contractual obligations, enforcing trademarks and non-competes, and resolving disputes with franchisees.
Like many of her peers, Mackenzie believes that litigation should be a last resort and it is generally in the client’s best interest to avoid litigation whenever possible. However, she acknowledges that there are situations where litigation is necessary to protect the rights and interests of her clients. In such cases, Mackenzie brings her extensive litigation experience to the table, ensuring that her clients are well-prepared and informed about the process and potential outcomes.
“When I work with franchisees, if they’re litigating with their franchisor, it typically stems from a notice of default. They’ll say: ‘My franchisor sent me this notice. They’re trying to make me do X. I don’t want to do it for this reason, or I can’t or I’m losing money. How do I save my business? Are they going to take my business away? What are my options? Can I fight this?’”
“From the franchisor side it’s the same conversation, just a different perspective. A lot of times I have a franchisor saying: ‘They’re not paying, they’re not doing this. We’ve reached out to them, we’ve done X, Y and Z. Now, what are our rights and obligations under the contract? What can we do to force them to comply or get them to comply? If they don’t comply, what are we allowed to do?’ So, it’s kind of two sides of the same coin. Thankfully, many of the franchisees and franchisors we work with are looking for a solution, so we can help them save their business and relationship with the other side.”
Communication and handholding
One of the main challenges in franchise law is effectively communicating with clients who may not have a legal background. Mackenzie understands the importance of breaking down complex legal concepts into understandable terms.
Mackenzie also emphasizes the importance of being a trusted advisor and providing support to clients during stressful times. She recognises that clients often reach out to their lawyers when they are facing challenges or uncertainties. By offering guidance, reassurance, and a hand to hold – often long after the office has closed – she tries to alleviate their concerns and help them navigate the legal complexities.
“As a litigator, you have to be prepared and be on top of all of the background work that goes into preparing to go to bat for the client, knowing what claims they might have and what their leverage would be. They need an attorney who knows how to do that and isn’t afraid to take their case to trial. But then you have to also look around for some common-sense solutions and say, ‘Do we really want to go down this path?’ This scorched earth path isn’t the right choice in a lot of businesses. In a recent case we were able to help a franchisor buy out a franchisee that was having operational issues in lieu of litigating and taking over their business. From our client’s standpoint, they may have been entitled to exercise their rights and ultimately take over the business, but it would have held them back from pursuing other business ventures, and their adversary would not have been collectible so they likely would have lost their attorneys’ fees, which may have exceeded the price we ultimately paid for the business. The closing happened within two months of our client sending a notice of default, so they were able to move on and turn this into a win very quickly.’”
Litigation: a game of chess
Mackenzie likens litigation to a game of chess, where strategic moves and careful planning are essential. Each case presents its unique challenges, and the actions of opposing counsel can be unpredictable. It’s why Mackenzie builds trusted professional relationships within her small, franchise legal circle.
While Mackenzie primarily focuses on the US, she and her partners have consulted on international disputes and represent international clients in US litigation. They also have a network of local counsel across the country to assist with filing issues, procedural deadlines, and understanding local judges’ preferences.
The role of IR Global
Through IR Global, Mackenzie has connected with attorneys worldwide, allowing her to provide resources and expertise to clients who have international franchising needs. The network has been particularly useful in finding local counsel for clients outside New York and in obtaining specialised expertise, such as accounting services, when necessary.
“My partner Michael introduced me to IR Global and the first event I went to was a meeting in Charlotte. Everyone was so incredibly welcoming and had really interesting complementary practice areas. There were quite a few lawyers that we could work with; we’re always looking for local counsel.”
“With franchise issues coming up, people in the group can use us as a resource. We’ve reached out to find experts to use as accountants as well. We used a valuation expert recommended by the group and a local counsel in Alabama recommended by a group member as well. We’ve also gotten quite a bit of franchise litigations from the group.”
Balancing work and personal Life
Outside of her legal career, Mackenzie is busy with her two young children and a puppy. She also enjoys skiing and sharing her love of the great outdoors with her children. Despite her demanding schedule, Mackenzie manages to strike a balance between her professional and personal and family life.“I grew up in upstate New York, so I go up there to spend time on Lake George in the summer; teaching my kids how to ski in the winter. All that keeps me busy – very busy.”
