Start Up Franchisors and Alternative Distribution Models

Successful companies who have a proven or unique concept will often consider expansion through franchising. However, when making the preparations to enter the franchise market, it is critical to obtain experienced legal counsel to provide guidance in complying with complex U.S. franchise laws and regulations, structuring the business venture to meet the requirements of law and the goals of the business, and managing the issues that will frequently arise throughout the process.   It is critical to hire an experienced franchise lawyer to prepare your franchise documents, as it often costs more to correct a poorly drafted set of documents than it does to create a legally sound set of documents from the start.

We assist start-up franchisors with:

  • Analyzing and structuring franchise programs and non-franchising licensing alternatives;
  • Planning and structuring your business and expansion plans;
  • Preparing your Franchise Disclosure Document (FDD), franchise agreement, and other franchise related documents
  • State and federal franchise registrations
  • Franchise sales compliance counseling
  • Protecting your intellectual property and brand identity
  • Developing uniform system standard and policies to enforce those standards
  • Drafting and negotiating third party vendor contracts

While franchising can be lucrative, we also recognize that franchising may not the most effective structure for business expansion, and a license, distributorship, or some other model may be better suited.  We are experienced in assisting clients with these alternative distribution models and can help clients avoid the legal pitfalls which might result from a license/distributorship later being found to be an “accidental franchise.”

Because franchising in the United States is regulated at both the federal and state levels, it is imperative for a business considering expansion to determine whether its business arrangement constitutes a “franchise” and, if it does, to comply with all applicable federal and state laws. It is critical to remember that it is irrelevant what a contract or relationship is actually called by the parties or how a contract is titled.  Indeed, the law will look at substance over form, and if a “license agreement” or “joint venture agreement” otherwise meets the legal elements of a franchise, the relationship will be deemed a franchise in the eyes of the law.  Experienced and competent counsel with experience in franchise law is essential for determining whether a certain transaction or relationship is regulated as a franchise to minimize risk in the long-run.

Emerging and Established Franchisors

As a franchise system begins to emerge and mature, the company will also need legal advice to help the business expand and to manage relationships with franchisees. We provide our emerging and established franchisor clients the following services:

  • Structuring license relationships for expansion in nontraditional locations such as airports, universities, stadiums and health care facilities
  • Counseling clients with operational solutions for franchise expansion and relationship matters including supply chain issues, creation of purchasing coops and implementation of system-wide change
  • Expanding into foreign countries through master franchising, area development relationships, joint ventures and other business structures
  • Transfer and termination counseling, including preparing transfer consents and termination notices and enforcement of contract termination
  • Litigation and dispute resolution;
  • Franchise Mergers and Acquisitions;
  • Continuing state and federal law franchise law compliance and registrations, and updating the FDD and ancillary agreements to reflect changes in the franchise system

In addition, we are experienced in providing day-to-day general counsel services for franchisors in a manner more efficiently and economically than having a full-time in-house legal team. Our franchise attorneys have served as general counsel to several national and international franchise systems, making us well-equipped to handle your franchise-related operations, human resources, customer and franchisee relationships, and other matters, so you can focus on your business.