Franchises
Franchises are unique opportunities for small business owners to "buy" into a business with an established product or service, supply chain, and good will. Typically the franchisor licenses trademarks and proven methods of doing business to a franchisee in exchange for a percentage of gross sales or profit, as well as the annual fees, and the purchase of supplies and materials from the franchisor. The franchisor also typically provides various tangibles and intangibles such as national or international training, advertising and management and marketing support. Some of the most common franchises include McDonalds, Dunkin' Donuts, Pizza Hut, SuperCuts, and Midas just to name a few.
Franchises and franchise offerings are governed by various state and federal laws including the Uniform Franchise Offering Circular (UFOC) which requires franchisors to disclose certain information to potential franchisees. Individual states may also require the UFOC to contain specific requirements. This means that many franchisors have a unique UFOC for each state or sometimes are able to include all state specific requirements into one document. Compliance with these regulations is time consuming. For potential franchises, the UFOC often reads like a conviluted set of rules and regulations. Most importantly for franchisor and franchisee alike, all franchises are not created equal and do not always provide a wonderful business opportunity for an individual who wants to operate their own business. As evidence of this, there have been recent lawsuits by franchisees against the frachisor for fraud and mismanagement.
How We Serve Our Clients
Our experienced attorneys will conduct thorough due diligence and review of the franchise documents to educate you about the potential risks regarding a particular franchise opportunity. We can also assist you in negotiating with the franchisor and potential buyer in the event you desire to sell your franchise. As an entreprenuer with a novel or innovative business, we can discuss with you your options for creating a franchise or simply licensing your intellectual property rights.
