Find a Franchising Lawyer

Franchising allows an individual to sell or market a product with the permission of the manufacturer. In the United States, there are four different types of franchising: product, manufacturing, business opportunity ventures and business format franchising. Perhaps the best-known franchises are fast-food restaurants.

Franchising is an ideal way for entrepreneurs to get into business and enjoy the competitive advantage of already-established brand names and products. Franchising is also an ideal way for owners of existing businesses to expand their market and increase revenue. But challenges come with a franchising opportunity.

Franchising involves a host of complex federal and state (and sometimes international) legal issues such as copyright, antitrust, employment, real estate and intellectual property laws. It involves contractual documents, litigation of disputes, complex tax issues and trade regulations. Franchising law also evolves and presents new challenges. In 2004 in California, for example, an issue arose on whether franchisors should be considered commercial finance lenders.


The Federal Trade Commission governs franchise law in the United States. Still, franchise laws vary from one locality to another.

How to Choose a Franchise Lawyer

(1) Your lawyer should specialize in franchise law. Recognize the wide range of practice areas (from copyright law to tax laws) and find a lawyer that has experience in those as well. It's wise to select a lawyer in a firm that specializes in some of these other areas too. This will give you and your attorney the advantage of quick access to legal advice in these other areas of law, when necessary.

(2) Seek an attorney with experience in representing both franchisors and franchisees; your legal advisor will be more valuable to you if he/she understands the perspectives of both a franchisor and a franchisee.

Franchisor

If you're the franchisor seeking to sell or franchise your existing business, your lawyer will need specialized knowledge to assist you with tasks such as registering patents or trademarks, handling financing transactions, preparing a prospectus or offering circulars, preparing and filing state registrations, and determining the level of disclosure you will need to provide to your potential franchisees. If you plan to expand internationally, you'll need a lawyer with global business expertise.

Franchisee

If you're the franchisee, you will need assistance in understanding the implications of the contractual clauses in the franchise agreement you want to sign. Your lawyer will also help you with lease operations, ensuring regulatory and statutory compliance, registrations, and FTC advertising compliance.

As the franchisee, you'll also want to select a lawyer with expertise in representing start-up companies. Make sure your lawyer is a good litigator not just skilled in the paperwork challenges of franchising law. If your franchisor doesn't honor the agreement, misrepresents some claims or allows encroachment in your territory, you will need a tough courtroom lawyer.

(3) Finally, make sure your lawyer is committed to your long-term success.

By Kathleen Goolsby           


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