What is a Franchise Agreement?

The Franchise Business Model

Buying a franchise lets you run a business. You pay a fee to use the business model, brand, and support of the original company, called the franchisor, for a set number of years. They help you with things like choosing a location, training, and giving you a manual to operate your business. They also offer ongoing support through things like newsletters, a help hotline, a website, and workshops.  When you own a franchise, there are specific costs, rules set by the franchisor, and agreements you need to follow.  Those rules and costs are disclosed in the Franchise Agreement and in the Franchise Disclosure Document.

Franchise Disclosure Document (FDD) Requirements

The Federal Trade Commission requires all franchisors to give potential franchise buyers a Franchise Disclosure Document (FDD). This document is detailed and long, providing all the important information about the franchise and the conditions for acquiring it. Hiring a lawyer who specializes in franchises can be very helpful. They can assist you in understanding this complex document, identifying any potential issues, and formulating questions to help you better evaluate the franchise opportunity. The FDD includes 23 specific items of information, such as:

• The Franchisor and Any Parents, Predecessors, and Affiliates: Information about the franchisor’s business history and its affiliates.
• Business Experience: Backgrounds of key business executives.
• Litigation History: Details of any past or current litigation involving the franchisor or its executives.
• Bankruptcy: Whether the franchisor or its key executives have been involved in bankruptcy.
• Initial Fees: Costs you must pay initially to the franchisor.
• Other Fees: Ongoing fees like royalties, advertising fees, renewal fees, etc.
• Initial Investment: The estimated total investment required to start the franchise, including working capital.
• Restrictions on Sources of Products and Services: Limits on where you can purchase necessary supplies.
• Franchisee’s Obligations: What you are required to do as a franchisee.
• Financing: If the franchisor offers financing and under what terms.
• Franchisor’s Assistance, Advertising, Computer Systems, and Training: Support provided by the franchisor.
• Territory: Details of the territory rights and exclusivity.

Dallas Franchise Law Lawyers: What Our Attorneys Can Do For Franchisors!

Using an attorney for franchise agreements helps navigate the complex legal terrain and protect your interests. Wilson Whitaker Rynell, a seasoned franchise firm, brings invaluable expertise in drafting, negotiating, and reviewing franchise agreements. We can assist with confirming that your franchise documentation complies with federal and state laws, helping you avoid costly legal disputes and misunderstandings. Contact of office today or call to schedule a consultation. 

Wilson Whitaker Rynell can provide tailored advice on franchise law compliance, intellectual property rights, potential liabilities, and can advise franchisors on all the legal aspects of franchising and guide them through each stage of business development, including:

• Assessing Suitability for Franchise Expansion: Evaluating whether the franchise model aligns with business expansion goals.

• Establishing a Comprehensive Franchise Program: Developing a thorough franchise program, encompassing master franchising, developer contracts, broker partnerships, and other structural components.

• Drafting Franchise Documentation: Negotiating and drafting essential documents such as Franchise Disclosure Documents (FDDs), franchise contracts, and associated paperwork.

• Managing Regulatory Compliance: Initiating and completing franchise registrations and ensuring compliance with franchise laws at both state and federal levels.

• Identifying Potential Franchisees: Sourcing and evaluating potential franchisees to ensure they meet the franchisor's criteria.

• Facilitating Franchise Sales: Negotiating the sale of franchises and overseeing the transaction process.

• Addressing Legal Issues: Handling antitrust concerns, including matters related to resale price maintenance and exclusivity agreements; and ensuring adherence to relevant state and federal laws, including those governing intellectual property and employment.

• Managing Supply Chain and Intellectual Property: Overseeing supply chain logistics and registering/licensing intellectual property such as trademarks, service marks, and trade secrets.

• Handling Cross-Border Franchising: Navigating the complexities of cross-border franchising, including compliance with import/export laws.

• Real Estate Transactions: Managing commercial real estate transactions including purchases, leases, and subleases.

• Resolving Franchise Disputes: Mediating and resolving disputes between franchisors and franchisees, maintaining healthy relationships.

• Addressing Employment Law Matters: Providing guidance on employee benefits, resolving employment-related disputes, and ensuring compliance with relevant employment laws.

• Risk Management and Business Advisory: Identifying and mitigating legal and business risks while offering ongoing business advice to support franchise success.

Experienced Franchise Law Attorney Ready To Talk To You!

At Wilson Legal Group, we are dedicated to assisting franchise clients in achieving their goals. Our team of experienced franchise attorneys is here to safeguard your rights and interests, whether you are a franchisor or franchisee. Contact our office today to schedule a consultation.

Wilson Legal Group, PLLC serves clients across Dallas and throughout Texas with all franchising and franchise law requirements. We have successfully guided clients in Dallas, Houston, Austin, Frisco, Addison, Plano, Fort Worth, Plano, Allen, helping them make informed franchise legal decisions.