How An Attorney Can Help With Franchising

From your company’s perspective, franchising is a business growth and expansion mechanism. From a federal and state regulatory perspective, however, franchising is a strictly-controlled legal mechanism. If you have questions about how an attorney can help with franchising, the answers are inevitably a function of whether your franchise operations comply with that regulatory environment.

The attorneys at Franchise.Law help franchisors throughout the United States adhere to the federal and state regulations that apply to their businesses. While we are licensed in North Carolina, we are a federal and multi-state practice that can advise franchisors on their franchise regulation compliance obligations.

What Are a Franchisor’s Primary Legal Obligations?

Every franchisor, regardless of which state they are headquartered in, will need to prepare a detailed Franchise Disclosure Document (FDD) that establishes the foundation of their franchising operations. One of the key ways that a lawyer can help with franchising is to prepare and compile a franchisor’s FDD and keep it updated as the franchisor’s business changes and expands. Individual states that the franchisor is expanding into may have particular requirements for the FDD, and an experienced lawyer could quickly and efficiently modify the FDD to reflect those state-specific matters.

An attorney could also manage other granular matters that are components of the franchisor’s operations, such as:

• Trademark clearances and registrations for brand names and logos that represent the franchisor’s product and service offerings
• Drafting and negotiating core franchise agreements and other contracts
• Reviewing commercial leases and analyzing local real estate zoning restrictions that may affect what products and services may be offered in certain territories
• Establishing the optimum legal structures (e.g., C corporations, LLCs, etc.) for tax and liability purposes
• Analyzing training and support manuals for compliance with FDD warranties and representations

Businesses that minimize legal involvement at the early stages of their franchising operations might find themselves embroiled in challenges from regulators, which creates a need for more involved legal representation at a later date. Involving a lawyer early in the process is often more efficient and cost-effective.

Do Franchisors Need Ongoing Legal Help?

A lawyer’s role in a business’s franchising expansion rarely ends with the legal services provided at the commencement of that expansion. In particular, the FDD is a constantly evolving document that must be amended to reflect changes in the business and its finances, entry into new states and territories that have different regulatory requirements, and sales of franchises by existing franchisees. An attorney’s help is crucial for all of these franchising issues.

Further, franchisor-franchisee lawsuits are not uncommon, with disgruntled franchisees often suing for:

• Breach of contract
• Fraudulent misrepresentations
• FDD compliance issues
• Territorial encroachments
• Other causes

You can never completely eliminate litigation risks, but if you are named in a lawsuit, an attorney who has in-depth knowledge of franchise laws, like the attorneys at Franchise.Law, could provide the strongest possible defense to minimize your liability. Attorneys who are involved with a franchisor’s operations from the beginning may also be able to negotiate litigation settlements before either party incurs significant legal fees.

Call a Lawyer at Franchise.Law for Help With Franchising

Still wondering how an attorney can help with franchising? Speak with us today to learn how our legal representation could add value to your franchisor operations. We proudly represent franchisors at all stages of their franchise business expansion, from the signing of an agreement with a first franchisee through franchise growth into all 50 states and beyond.