Franchising is an excellent way to expand a business’ growth objective through franchise and distribution agreements, but the process is not simple. Franchise law is a complex combination of common law, statutory law, and agency regulations. We support our franchising clients with full spectrum support including franchise disclosure document development and registrations, franchise compliance, franchise agreements and negotiations, distribution agreements, system enforcement, brand protection, and regulatory compliance.
Your franchise attorney must understand your business and act as a business partner. Laura Canada Lewis and her team have been nationally recognized by their peers in the legal industry for their expertise in the area of franchise and distribution law. At Canada Lewis & Associates, we help clients start, grow, manage, and protect their franchises throughout North America.
Franchising is currently regulated at both the state and federal levels. Franchise law encompasses numerous practice areas, such as contracts, trademarks, copyright, employment, fraud and business torts, and dispute resolution. Let’s talk about how we can help you!
Franchising is a heavily regulated industry. At the federal level, the FTC Franchise Rule requires franchisors to provide prospective franchisees with detailed disclosures also known as a Franchise Disclosure Document (“FDD”), that contains information about the franchisor, the franchisor’s system, and the franchisor’s financial statements. Franchisors are prohibited from making “financial performance representations” about the potential success of a franchise opportunity unless the information is included in Item 19 of the FDD and the Item 19 disclosures meet the requirements of the rule. FDDs must be updated annually and anytime there is a material change to the franchise system or the franchisor.
Some states have enacted laws that regulate franchising and the relationships created by franchise agreements. Some of the laws have disclosure and practical requirements that vary from the FTC Franchise Rule, and often increase the compliance burden on franchisors. Additionally, many states have passed laws that are designed to protect franchisees from certain contract terms commonly found in franchise agreements. These laws must be considered when dealing with compliance, renewals and disputes with franchisees.
Franchise agreements usually contemplate long-term relationships, lasting 10-20 years or longer. It is not uncommon for franchisors and franchisees to have disagreements that result in mediation, arbitration, and litigation over the term of the relationship. We frequently represent franchisors prosecuting or defending claims such as: