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Franchise Advice: Existing Franchisors

Legal Concerns for an Existing Franchisor

At any point within the lifecycle of a franchise business, there is potential for matters of a legal nature to arise. Whether you are the franchisor or the franchisee, you have any number of individuals and organizations that could make it necessary for you to seek out legal advice and counsel.  It could be anything from revising an existing contract or franchise agreement to a lengthy court battle.

Regardless of the role you play in the franchise organization, you have several interests you will wish to protect and it will be important to have access to legal counsel and an accountant, at any given time. These individuals have the knowledge to guide you along the way and warn you of pitfalls that could occur.

It is important to make sure that any lawyer you turn to for any sort of legal service is seasoned and knowledgeable specifically in the subject of franchise law. Many who claim to specialize in law as it relates to franchises are business or general lawyers and actually have very little experience with franchise law.

There are two events that you could face, as a franchisor, in which you will want to make sure you have a qualified franchise attorney overseeing throughout the process - the transaction phase (writing up important contracts and documents) and litigation phase (facing a court battle either as the defendant or the plaintiff).

Franchise Contracts and Documents

The agreement between a franchisor and a franchisee is quite lengthy and must cover many important details. In addition to the Financial Disclosure Document (previously known as the Uniform Franchise Offering Circular or the UFOC), there is a wide array of legal documents that need to be drawn up to define the relationship along with negotiations, throughout. Of course, this has to occur with the birth of each new franchise unit as the franchised business sets out to expand and reach new territories. There are many factors that will often prevent a one-size-fits-all approach, including the franchisee’s territory and competitive landscape and changes to the parent organization's Financial Disclosure Document to keep it updated and accurate.

Read more about Franchisor Contracts and Documents…

Franchisor Litigation Concerns

Within any franchised small business, there is potential for a plethora of lawsuits and legal battles. The hazards of this happening can be even greater as part of a franchise organization than in many other business models. In modern times, you even have customers suing fast food chains over their weight problem. Whether you are looking at claims regarding trademarks or a breach of contract within the franchise organization, facing these lawsuits alone or with lawyers who do not specialize in franchise business can be costly mistake.

Read more about Litigation Concerns…

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