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Why Do I Need a Franchise Attorney?

December 04, 2023
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Franchise Attorney
There are about 1.3 million lawyers in the United States, but only a small percentage of them specialize in franchise law. Only this group of individuals is conversant in the language of franchising and is familiar with the franchise relationship laws that govern the interactions between a franchisor entity and a franchisee investor.

When getting help with a franchise business plan or when purchasing a franchise business as an investor, many people assume any attorney can assist them in crafting the finer details. However, taking advantage of the knowledge and experience of a franchise law expert offers the reassurance that you're getting the best possible franchise legal services from someone who specializes in this complex area of business law.

1. Franchise attorneys understand the unique underpinning of franchise law

The laws and regulations governing franchise businesses are quite unique to the industry. In order to protect people investing in a franchise opportunity, in 1979 the Federal Trade Commission issued its Rule on Franchising which demanded pre-sale disclosure of franchise terms by the franchisor to the franchisee. No other such franchise relationship laws exist on the federal level, but across the United States there exists a patchwork of laws within individual states, dictating the guidelines by which franchisors and franchisees must abide.

This variation in state law creates a multi-layered process for franchise entities that want to present their opportunity to investors across multiple states or nationwide. Only a franchise law expert knows the idiosyncrasies of each state's set of regulations and can navigate the very delicate process of complying with the Rule on Franchising and individual state franchise relationship laws.

2. You need a franchise law expert to prepare your FDD

If you're looking for help with a franchise business plan, a franchise attorney can help you understand the first steps toward creating your legal franchise disclosure document. This often lengthy document lays out the exact terms of the franchisor's business offering, including corporate information, investment costs, and terms of the franchisor-franchisee relationship, including training, support, renewal and termination. The FDD also includes state-specific pages in which the franchisor hopes to sell a franchise.

To put it mildly, an FDD is not an easy document to prepare. Before considering crafting such a document, a franchisor must make many difficult decisions about the details of their offering. A franchise law expert provides the counsel and context to allow clients to make the best decisions for their program's future.

From an investor's perspective, a franchise attorney can help decode a franchisor's FDD, and help them understand how the terms will affect them on a very real, day-to-day basis. They can also help prospective investors develop and propose negotiations. This is advice and perspective that only franchise legal services from a franchise law expert can offer.

Franchise Disclosure Document

3. A franchise attorney can step in if troubles arise

One major benefit of retaining a franchise attorney for franchise legal services is having someone on your side in case problems emerge and need to be resolved. If you've got a franchise law expert by your side from the beginning, you'll have a partner who understands your business and who helped develop the legal and contract terms governing it. A franchise attorney familiar with your business can easily step in if a dispute arises between a franchisor and a franchisee, or between those entities and a vendor or government regulators.

Only a franchise law expert can properly advise you on choosing the right business entity and relevant trademark protections for your company. And, in the worst-case scenario that you find yourself in court, a franchise attorney can offer you representation with a wealth of knowledge regarding franchising and your specific business.

For help with a franchise business plan, an FDD or other franchise law-related matters, please contact Harold L. Kestenbaum for help today!

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Category: Franchise Legal
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