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Is it better to find an attorney to assist in a simple franchise or one that can write a contract?

We have someone who wants to franchise with our company. we want to keep things simple and affordable for both parties. We are not sure if we want to find a franchise attorney or find someone who can help us just write a contract?

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Attorney answers (5)

Reputation Level 7
Use a lawyer with lots of experience in franchise law.

Franchising is governed by very particular federal laws. And some states impose additional requirements. Some of these laws impose stiff civil penalties for non-compliance. So, it's very important to engage a lawyer who knows the ins and outs of this area of law.

p.s. I have seen some companies try to claim that they are not really franchises, and so aren't governed by the FTC Rule (and related state laws). This doesn't work. The FTC has specific guidelines as to whether you are a franchise or not. So how you define your own relationship (i.e. "we're not a franchise, we're a ...") or how you entitle your documents (i.e. "we didn't use the word franchise") doesn't free you from FTC requirements.
6 people marked this answer as good

Avvo Pro

Reputation Level 13
There are regulations that apply at the federal and state levels to franchise relationships. Failure to follow these can result in significant fines and penalties. You need to prepare (and possibly register) a FDD Franchise Disclosure Document. This disclosure document, usually a hundred-plus pages in length, has 23 chapters of information designed to give prospective buyers enough pre-sale information so they can make an informed investment decision. Attached to the document are audited financial statements and the franchise contract.

You will also need a franchise operations manual and training program curriculum.

You obviously require the services of a franchise attorney.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise
3 people marked this answer as good

Reputation Level 15
My firm advises both franchisors and franchisees and I can tell you that Franchise law is anything but simple. Franchise offerings are regulated by the Federal Trade Commission and you must be in compliance with the rules and create a thorough franchise disclosure document, franchise agreement, and related documents. If you do not comply with the rules, there are private rights for suits, the FTC can sue for $11,000 per violation, in addition to other remedies. Many states have their own rules and that you also must comply with.

Franchising is not something that should ever be done without experienced legal counsel with expertise in franchise laws. The costs of doing this incorrectly are far more costly than the costs for legal advice. Talk to an attorney before you discuss this further. Good luck.

DISCLAIMER—This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship. For legal advice, you should retain legal counsel regarding your specific circumstances.
2 people marked this answer as good

Reputation Level 6
In many instances, there are restrictions in the franchisees franchise agreement that may limit their ability to advertise without the franchisors permission or approval. Your best bet is to approach the franchised restaurant and give them the offer and let them take it from there depending on their franchise restrictions.

As always, this information is for informational purposes only and does not establish any attorney/ client relationship.
2 people marked this answer as good

Reputation Level 9
You MUST hire a franchise attorney. The simple fact is that franchise law is a very unique area of contract law. Most contract attorneys could do more harm than good if they are not familiar with Franchise laws.

Our firm handles both Franchisor's and Franchisees. We also offer free consultations. If you would like to speak with us, please feel free to do so. However, do not have this handled by a contract attorney. The risks, as discussed by my esteemed colleages are simply too great.

DISCLAIMER—This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship.

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