Some businesses find that they work so well on a local scale, they would like to expand rapidly to other regions. When capital is not sufficient for growth through a chain model, franchising can be the answer for entrepreneurs. However, each state and the federal government oversee franchising differently. In order to sell franchises, a company needs a compliant Franchise Disclosure Document (FDD). And, in order to be successful after the sale, a company needs a solid franchise agreement outlining the relationship between the franchisor and franchisee.
One of the challenges facing a franchisee is the fact that the franchisor exerts tremendous power in the relationship. Sometimes, this power is used in a way that takes advantage of the franchisee, for example, disputes over royalties. Another challenge is when the franchisee discovers that the franchisor has made misleading or outright false claims. Fortunately, we can offer legal advice for franchisees. State and federal law provide significant protections for franchisees that can help level the playing field.