The Federal Trade Commission recently announced a new rule that will ban employers from imposing non-compete clauses on their workers - but the new rule will not prohibit non-compete provisions between franchisors and franchisees.
Finance and Legal Issues in Franchising
In its update in 2007, the Commission decided to eliminate the requirement that franchise sales organizations and brokers provide material disclosure to the potential franchisees they are working with. While removing that information from a franchisor’s disclosure document was a...
We recommend scrubbing franchise manual libraries, training programs, and agreements to remove unnecessary controls. Our goal is to put the franchise relationship back into proper balance between brand standards versus control.
This in-depth presentation covers joint employment issues, including the legal landscape and how franchisors should change the ways in which they maintain and enforce brand standards.
Understanding the root cause of noncompliance can surface underlying issues the franchise system may need to consider in formulating a change strategy.
Of all the mistakes new business owners make, the most fatal is failing to anticipate the cost of getting and staying in business.
A qualified franchise attorney can separate contract terms and obligations that are “acceptable” or a “common practice” in a franchise relationship from those that may be excessive or unusual, and can help you negotiate with a franchisor.
Companies new to franchising have difficulty understanding the essential differences between services provided by experienced franchise legal counsel and those provided by qualified franchise consultants in developing the structure and strategy of a franchise system.
In order for franchisors to legally franchise their businesses in the United States, franchisors must be aware of, and comply with, all of the foregoing laws described in this article.
There is a second type of encroachment in franchising, dealing with a different “turf” battle. What, if any, boundaries are there for the services lawyers and consultants provide to their clients?
Most franchise systems have procedures in place for requesting approval of new products or services. Often the new items, after thorough research by the franchisor’s staff, are tested in company-owned locations or in franchisee-owned locations.
When MSA works with a client as part of a litigation strategy team, our role is generally to facilitate business discussions focused on preserving the value of the franchise system, and keep the franchisor-franchisee business relationship on a separate track.
In franchising, a tension often exists between the lawyer and the consultant because many issues don’t neatly fall into purely legal or purely business buckets.
Of all the inherent advantages in owning a franchise, the one overriding strength is franchising’s ability to replicate the consumer experience consistently from one location to another.
An expert in franchise law can help you understand what you are getting yourself into, and is your best protection against succumbing to what might kindly be described as your “entrepreneurial fever.”
It's estimated that over $100 billion in seed capital is invested in businesses in the United States by friends and family. The angel investor market accounts for approximately $80 billion in seed capital investment.
One approach to funding your franchise is through traditional financing. Another is to find a partner, or one or more investors, willing to invest in the deal.
Considering selling your franchise? This article explains some of the important differences between an asset sale vs. a stock sale.
If you are considering becoming a franchisee, be aware that most of the "business advisors" serving the franchisee community are actually franchise brokers.