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The central tenet of any business relationship is the agreement between the parties. Whether it is for a sale, providing services, or forming a business, the contract is meant to contain the rights and obligations of both sides. This is the case for an arrangement between a franchisor and a franchisee, and an experienced Georgia franchise agreement lawyer from Franchise.Law could help make sure that your contracts cover all the necessities.
Franchise.Law is based in Charlotte, NC, and although we are not licensed to practice in Georgia, our franchise attorneys are able to represent clients in matters of federal law, including franchise regulations. This allows us to serve franchisors and entrepreneurs like you, no matter where you are in the country. We are here to help with your franchise’s needs.
Georgia operates as a business opportunity state, meaning that a franchisor must provide certain disclosures to a prospective franchisee before either signs any contract to do business. The specific requirements are listed under the Official Code of Georgia Annotated § 10-1-411(b) and include information such as:
Some franchises may be able to substitute these requirements with those found in the Franchise Disclosure Document (FDD) as prescribed by the Federal Trade Commission. This document contains 23 items, which are codified under 16 Code of Federal Regulations § 436.5. One of these items is attached copies of all agreements related to the franchise.
While both the disclosures and the agreement are relevant to the franchising process, they each serve distinct purposes. The disclosures, whether under state law or the FDD, are meant to be a collection of documents that provide the prospective franchisee with information about the franchisor, allowing them to make an educated decision on whether or not to pursue the opportunity.
On the other hand, the agreement is the binding arrangement between the franchisor and the franchisee that sets out both sides’ rights and responsibilities in the relationship. For example, the franchisee is allowed to use the franchisor’s trademarks and products in exchange for paying royalties.
However, there are no specific provisions that one of these franchise contracts must contain in Georgia, which is why it is vital to retain an attorney. It is easy to miss an important obligation without legal guidance.
Since the agreement is a binding and enforceable arrangement, retaining knowledgeable legal counsel is critical for franchisors in Georgia. The contract may need to contain more than just the use of trademarks and payment provisions.
For instance, it may be necessary to include inventory purchases or territory limits in the contract. If the franchisor uses certain intellectual properties, the agreement should have specific restrictions on when and where they can be used by the franchisee. Also important, and perhaps often overlooked, are out clauses and transfer provisions in the event that one side wants to exit the relationship.
A Georgia franchise agreement lawyer could help you ensure that all necessary items are accounted for in the agreement. This is key to a smooth relationship with your franchisees.
No business is the same, and we take the time to understand your franchise’s needs so we can tailor your arrangements to fit your business. Contact Franchise.Law to tell us about your business goals and let us make sure your contracts set you up for success.