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Running an established franchise system creates legal needs that continue long after the first location opens. Your disclosure documents have to stay current, your registrations may require renewal, your trademarks need protection, and your franchise agreements must continue to reflect the way your system actually operates.
As your franchise grows, those responsibilities often become more complicated. An experienced franchise attorney can help you manage these ongoing obligations while protecting the business and brand you have already built. Read on to learn about our existing franchisor services.
As your franchise system grows, your legal documents and brand protections must evolve to reflect changes in your business.
An existing franchisor cannot treat its Franchise Disclosure Document (FDD) as a finished product. Your FDD has to accurately describe the franchise opportunity you currently offer, and keeping these documents up to date is an important part of existing franchisor services.
Franchisors generally need to update their FDD annually, and certain material changes may require additional updates during the year. An attorney can review your existing FDD and assist with the update process.
Your franchise agreement establishes the rules that govern your relationship with franchisees. An agreement that worked well when your system had a handful of locations may no longer address the needs of a larger or more mature franchise network.
Your trademarks connect every franchised location to the same brand. As the system grows, protecting those marks becomes increasingly important. There are countless issues an existing franchisor might need trademark help with, from filing renewals to addressing changes to existing branding.
Ongoing compliance involves meeting applicable state requirements and following disclosure rules throughout the franchise sales process.
Federal compliance is only part of your responsibility as a franchisor. Depending on where you offer or sell franchises, state registration, filing, or disclosure requirements may also apply. Franchise counsel can manage registrations and renewals while keeping you updated on any changes to the law. This service is especially helpful for existing franchisors with locations in multiple states.
An established franchisor must follow disclosure rules every time it offers and sells a new franchise. Having an updated FDD does not, by itself, make the sales process compliant.
Federal law regulates how and when franchisors provide the FDD to prospective franchisees, and state requirements can add another layer of obligations. Having an attorney by your side is the best way to navigate these compliance hurdles during the sales process.
Managing an established franchise system means maintaining consistent standards across locations while addressing issues that arise.
Consistency gives a franchise system much of its value. Franchisees who ignore reporting requirements, operational procedures, payment obligations, or other system standards can create problems that extend beyond a single location. That is why it is so important to conduct audits to identify problems before they get out of hand. Of course, the scope and nature of your audit will depend on what is allowed under your franchise agreement.
Not every franchise relationship lasts through the end of its intended term. A franchisee may fail to pay required fees or otherwise default on their terms, leaving termination of the agreement as the only option.
Termination requires careful attention to the franchise agreement and applicable state law. Notice and cure requirements may apply, and an improperly handled termination can expose the franchisor to unnecessary legal risk.
An ongoing relationship with franchise counsel gives your attorney a better understanding of your system and the agreements you use. With the help of our attorneys, you can ensure you stay in compliance and avoid the kind of errors that could put your franchise in jeopardy. Contact Franchise.Law today to learn more about our existing franchisor services.