Franchise Law
If you are considering a first-time franchise purchase, you’ll want to do your homework. The due diligence process is different when considering a franchise than when purchasing or starting an independent business. The franchisee has some of the same needs as any new business owner but because of the franchisee-franchisor relationship affecting all aspects of the business there are nuances and issues particular to franchisees. A franchisee needs to carefully avoid signing agreements or making commitments that interfere with commitments to the franchisor. An experienced franchise attorney will help you navigate this terrain so that you can get off to the strongest start and protect and strengthen the value of your business.
At the outset:
- Entity formation
- Due diligence and business valuation
- Loan/ financing document review
- Review of franchise disclosure document (fdd) and franchise agreement
- Review and negotiation of personal guarantees for franchisor
- Commercial real estate lease review and negotiation
- Obtaining permits and licenses
Growing your franchise:
- Multi-unit agreements
- Area development agreements
- Master franchise agreements
Operating your franchise:
- Employment agreements, policy manuals and other employment law issues with employees and independent contractors in franchise context
- Other third- party agreements with suppliers, vendors, etc.
- Maintaining corporate compliance and any industry- specific compliance
- Meeting and managing commitments to franchisor
- Franchise renewal
Issues that may arise with franchisor, fellow franchisees or other parties:
- Territorial protection and encroachment
- Franchisor breach of contract
- Franchise termination or non-renewal
- Enforcement of trademark and other protections
- Onerous remodel and upgrade requirements
- Franchisor fraud and misrepresentation
- Enforcement of franchisor commitment
Transitioning Out of Ownership
- Transfer or sale of franchise
- Business succession and estate planning
- Compliance with non-competes
