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If you are ready to franchise your business, there is information you must disclose to prospective buyers before a purchase agreement can be signed. While Georgia does not have a general franchise registration or disclosure law for most business types, franchisors must still comply with the Federal Trade Commission’s (FTC) Franchise Rule to ensure your interests and those of prospective buyers are protected, and that what you are offering is fair.
There are penalties when franchisors fail to follow the legal framework for selling franchises, which are defined as a business you sell that is subject to a marketing plan you have prescribed. To avoid penalties as high as $10,000 per infraction and other remedies for non-compliance, let a Georgia franchising structuring and development lawyer work closely with you and evaluate your franchise documents to ensure compliance.
As a franchisor, you must provide potential buyers with a Franchise Disclosure Document (FDD) before any franchise agreement is signed. An FDD includes pertinent information about your company and its officers, financial statements, and litigation the company has been involved in. This helps buyers get a clear picture of what they can expect. The GFPA does not permit you to enact unfair practices, which can be a reason for penalties. The skilled attorneys at Franchise.Law understand structuring and developing your franchise in Georgia, and across the country from our Charlotte, North Carolina base. We abide by federal multijurisdictional practice rules, including laws that regulate franchises prescribed by the Federal Trade Commission (FTC).
A franchise agreement, or asset purchase agreement, is the definitive document you will use to structure your business arrangement with your buyer. Unlike a general sale of a business in which sellers are no longer involved, a franchise, by definition, includes marketing and products prescribed by you, the franchisor, which ensures consistency when a consumer sees your branding in any location.
The franchise agreement describes the rights and responsibilities of both parties, the renewal terms, the length of the franchise’s operations under the prospective owner, the fees the new owner will pay, such as for marketing, training, and royalties, and how you, as the franchisor, will support the franchise. At Franchise.Law, we dedicate our practice to our clients’ success because we know that small businesses are the backbone of America. Your success as a Georgia franchisor is our success as your franchising structuring and development attorneys.
If you decide to become a franchisor, you must register your FDD with the Federal Trade Commission and update it annually or when a material change occurs. Transparency is key, and the lawyers at Franchise.Law stay on top of changes, creating lifelong relationships with our valued clients. We craft the documents you need to market and sell your franchise opportunities, from your internet presence, name recognition, and branding to managing your unique product or service. We aim to circumvent disputes between you and your buyers, making your transactions seamless and profitable for a lifetime. If you are excited about franchising the business you have developed, let our Georgia lawyers structure the documents you need to be in compliance with federal rules.
Franchises have been a staple of the American business landscape for decades and are a welcome sight for travelers and Georgia locals looking for consistency in products and services. Whether your business is unique food or products that enhance people’s lives, franchising allows you to maintain control over your message and offer the best to consumers.
That is where Franchise.Law enters as your support partner. We could ensure you register under federal law and provide the documentation necessary to comply with all federal and state laws. As a franchisor, you must deal fairly with prospective buyers, and we are there every step of the way to support you and your project. Let a Georgia franchising structuring and development lawyer show you what we can do for you. Get in touch with us today.