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Although the entertainment industry may be unique in many ways, it still operates under franchise law concepts applicable to any industry. In any industry, a prospective franchise buyer should be wary of overly confident valuations, or unsupported estimates of future growth and profitability.
A recent example is the release by Warner Bros. of “Batman v. Superman: Dawn of Justice.” The producers apparently bet heavily on the movie’s ability to spawn a franchise, as its $400 million production and marketing budget gives it the dubious distinction of being one of the most expensive movies of all time. By one projection, producers hoped for a franchise of two new movie releases per year for the next five years. Yet reviews of the movie have been unfavorable, and a poor opening weekend could prove fatal to the entire investment.
Is there a lesson to be learned from this risky venture? Absolutely. Our law firm offers a comprehensive range of services to franchisees, including advice on finding a franchise that will suit a prospective owner’s specific needs and business goals.