FRANCHISE LAW
Franchise Law Articles
Plain-English analysis of FDD reviews, franchise agreements, exit strategy, and ongoing counsel for franchisees and franchisors.
482 articles
Franchise Compliance Program: A Franchisor's Guide
A franchise compliance program is the documented system a franchisor uses to meet its legal disclosure duties and hold every unit to the same brand and …
Does the FTC Non-Compete Rule Affect Franchises?
The FTC’s 2024 Non-Compete Rule never took effect, so it does not govern franchise non-competes — those are still controlled by state law and the terms of …
Do I Need My FDD Reviewed Before I Sign?
Yes — have your FDD reviewed before you sign. The Franchise Disclosure Document routinely runs well over a hundred pages across 23 items, the franchise …
Franchise vs License: What's the Legal Difference?
A license grants permission to use a piece of intellectual property — a trademark, a patent, a recipe — while the licensee runs its own business however it …
Cross-Default Clauses in Franchise Agreements
A cross-default clause makes a default under one agreement count as a default under another — so missing a payment on your lease or loan can put your franchise …
How to Handle Franchise Resales: Buyer & Seller Guide
A franchise resale is the purchase or sale of an existing franchised unit — the business, its assets, and the right to keep operating under the franchise …
License vs. Franchise: The Legal Difference That Matters
The legal difference between a license and a franchise comes down to a three-part test in the FTC Franchise Rule. A license grants permission to use …
Can a Franchisee Terminate a Franchise Agreement?
Yes — a franchisee can terminate a franchise agreement, but only for cause or by mutual consent, and only by following the process the agreement and applicable …
FDD Item 19: How to Read Financial Performance Data
Item 19 of the Franchise Disclosure Document is the only place a franchisor may legally tell you what its franchises earn — and disclosing it is entirely …
What Is a Franchise Business Review?
A franchise business review is a structured evaluation of a franchise system’s health — its financials, operations, and franchisee satisfaction — done …
FDD Registration States: Where Franchisors Must File First
FDD registration states are the states where a franchisor must file its Franchise Disclosure Document with a state regulator — and in most of them, wait for the …
Franchise Broker vs Consultant: What to Know
The most important thing to understand about franchise brokers and franchise consultants is that, in most cases, they’re the same thing — and …
Franchise Operations Manual: What It Is & Why It Matters
A franchise operations manual is the detailed how-to guide for running a unit of the franchise system — the document that turns the brand’s business model …
Infringement vs Breach in a Franchise Agreement
In a franchise dispute, “infringement” and “breach” describe two different kinds of violation with two different legal bases. Breach is …
Letters of Intent in Franchising: When and How They're Used
A letter of intent (LOI) is a short preliminary document that sets out the main terms of a proposed deal before the parties negotiate the full contract. In …
Master Franchisee vs Area Developer Explained
Master franchisee and area developer are the two main vehicles for multi-unit franchising, and the difference between them is fundamental: an area developer …
Single-Unit vs Multi-Unit Franchise: Key Differences
A single-unit franchise agreement gives you the right to own and operate one location. A multi-unit arrangement commits you to opening several — and that …
What Does Royalty Fee Mean in a Franchise Agreement?
A royalty fee in a franchise agreement is the ongoing payment a franchisee makes to the franchisor — most commonly a percentage of gross sales — in exchange for …
Personal Guarantees in a Franchise Agreement
A personal guarantee in a franchise agreement is your written promise to be personally responsible for the franchise’s obligations if your business …
Negotiating a Franchise Agreement: What You Can Change
You can negotiate a franchise agreement, but only at the margins — franchisors hold the royalty rate and brand standards firm to keep the system uniform, while …
