Explore new opportunities. Expand your reach. Scale your business.
At Framework Legal, we help franchisees and franchisors with business strategy and planning, regulatory compliance, franchise document review, and franchise related disputes. We want to help you succeed and make the best decisions possible for your growing business.
From start-up to exit, we have worked with franchisors and franchisees at every stage of the business life cycle post-formation, providing guidance and practical advice that they can rely on to scale their growing businesses.
Whether you are a franchisor or franchisee, there are many legal factors to consider before entering into a franchise agreement.
The FDD
The Franchise Disclosure Document (FDD) is critical to understanding the risks and potential rewards of any franchise business.
Experience
It is important for the experience, skills, and interests of a franchisee to align with the franchise's business objectives.
Capital Investment
Franchisees may be required to pay a non-refundable initial franchise fee and other startup costs.
Profitability
It is important to understand revenues and profits before entering into a franchise.
Franchising involves two parties, known as the franchisor and the franchisee. If you’re interested in franchising your business, you’re a franchisor. The entrepreneurs interested in buying into a franchise are the franchisees.
In the franchise model, the franchisor allows a franchisee to open a business using their brand, products, and services. The franchisee builds, owns, and operates the business, but is allowed to use the logo, name, products, services, and other assets of the franchisor.
In exchange for the rights to use these assets, the franchisee must pay the franchisor a number of fees, which can include startup fees as well as royalties. These royalties are taken as a percentage of the franchisee’s overall revenue.
We have worked with clients buying into exciting new franchise opportunities, as well as exiting from bad franchising deals. If we have learned anything through this experience, it is how important the Franchise Disclosure Document (FDD) is to every franchise deal. This is the document that franchises live and die by and your understanding of the document could be the difference between success and failure.
In the FDD, franchisees learn about the franchise’s financial health, how much an average franchisee makes, if the franchise is subject to litigation, how much it will cost to get their franchise up and running, and the franchisee turnover rate.
Before entering into a franchise agreement, we strongly recommend diving into the FDD and reviewing the terms of the agreement, building out a pro-forma to project possible revenues, asking the franchisor good questions, visiting other franchise locations, and consulting with an experienced attorney.
At Framework Legal, we work with clients who are buying a franchise, selling a franchise, or facing difficult franchising issues. In addition, we provide contract drafting and review, alternative dispute resolution, and ongoing general counsel support.
We know that the challenges of running a franchise business are always shifting and that legal needs evolve over time. That is why we offer predictable pricing, responsive communication, and practical advice.
If you are searching for a law firm that can scale with your business, then we want to talk. Contact our office today.