FRANCHISE LAW
Franchise Law Articles
Plain-English analysis of FDD reviews, franchise agreements, exit strategy, and ongoing counsel for franchisees and franchisors.
477 articles
Franchise Financing: The Legal Side Explained
The legal side of franchise financing comes down to three things: what the franchisor discloses about financing in the FDD, the terms of whatever loan you take, …
Franchise Letter of Intent vs. Franchise Agreement
A letter of intent (LOI) is a short, usually non-binding document that records what you and the franchisor have tentatively agreed before anyone drafts the real …
Gross Sales vs. Net Sales in Franchise Royalties
In almost every franchise agreement, royalties are charged on gross sales — your total revenue before expenses — not on net sales. That is the single most …
How Franchise Royalty Fees Work
A franchise royalty is the ongoing fee a franchisee pays for the right to keep using your brand and system — most often a percentage of gross sales, collected …
How to Create a Franchise Disclosure Document (FDD)
To create a franchise disclosure document (FDD), a franchisor drafts the 23 disclosure Items mandated by the FTC Franchise Rule (16 C.F.R. Part 436), attaches …
How to Negotiate a Franchise Agreement
Most of a franchise agreement is non-negotiable — but a prepared franchisee can often move the terms that matter most: territory, personal guarantees, transfer …
How to Properly Terminate a Franchise Agreement
To terminate a franchise agreement properly, follow the contract’s notice and cure provisions and any state franchise relationship law that overrides them …
How to Protect Your Franchise Brand Legally
You protect your franchise brand legally by registering your trademarks, licensing them to franchisees under a written agreement, and actually policing how the …
How to Read a Franchise Disclosure Document (FDD)
Read a Franchise Disclosure Document (FDD) by working the 23 standardized items in priority order — start with the money (Items 5, 6, and 7), the people and …
How to Resolve a Franchise Dispute: Your Options
Most franchise disputes are resolved without a courtroom — your franchise agreement usually dictates the path, often requiring written notice, a chance to cure, …
International Franchise Law: A Franchisor's Guide
Expanding a franchise internationally means complying with the franchise, contract, and intellectual-property laws of each country you enter — not just your …
Joint Employer vs. Independent Contractor in Franchising
“Joint employer” and “independent contractor” sound related but answer two different questions. Joint employer asks whether two …
Legal Structure for Your Franchise Company
When you franchise your business, you should almost always create a separate legal entity to act as the franchisor — most often an LLC or a corporation — rather …
Multi-Unit Franchise Disputes: How to Handle Them
The defining legal risk in multi-unit franchising is that a problem at one location can put all of your locations at risk — so handling disputes well means …
Net Worth vs. Liquid Capital in Franchising
Net worth is everything you own minus everything you owe; liquid capital is the cash — or near-cash — you can put your hands on right now. That is the core …
Non-Compete vs. NDA in a Franchise Agreement
A non-compete restricts what business you can run; a non-disclosure restricts what information you can use or share — and a franchise agreement almost always …
Operations Manual vs. Franchise Agreement: Key Differences
The franchise agreement is the binding contract that defines your legal relationship with the franchisor. The operations manual is the detailed playbook that …
Personal Guarantee vs. Collateral in Franchising
A personal guarantee pledges all of your personal assets to back the franchise obligations, while collateral pledges only specific, named assets. That is the …
Sole Proprietorship vs. Corporation for Franchisees
A sole proprietorship means you and the business are the same legal person, so you are personally on the hook for every debt and lawsuit. A corporation — or, …
Termination vs. Non-Renewal in Franchising
Termination ends a franchise agreement early — before the term expires, almost always for a stated cause such as breach — while non-renewal simply lets the …
