FDD and Franchise Agreement

The offer and sale of a franchise is regulated by the Federal Trade Commission (“FTC”). In addition, there are 14 states which have additional laws, regulations and requirements with which the franchisor must comply when making the initial offering. At the Franchise & Business Law Group, we are dedicated to providing our franchisor clients with accurate and complete Franchise Disclosure Documents (“FDD”) containing the correct disclosures.

The purpose of the FDD is to give a prospective franchisee a full picture of the franchise business and what he or she is purchasing. The information includes initial and ongoing obligations on the franchisee’s and franchisor’s part, anticipated costs for opening, the franchisor’s financials, and background information on the franchise system and the owners and officers. It is important that a franchisor strictly adhere to these 23 required disclosures, and to any additional state-specific requirements. Our franchise attorneys stay up to date with the latest developments in franchise laws and regulations. We can assist you in creating the correct documents to help you with your franchise expansion plans.

The Franchise Agreement is the actual contract between the franchisor and the franchisee. It dictates how the ongoing business relationship will be governed, ongoing responsibilities of the franchisee and what will happen in the event of a default. The Franchise Agreement and the FDD are required to tell the same story. Our franchise attorneys are skilled at creating franchise agreements that correctly set out all the duties and obligations of the franchisee, while providing the franchisor with the greatest amount of protections. Similarly, with the years of knowledge our attorneys have in franchise law, we have helped numberless prospective franchisees understand their FDD and Franchise Agreement and have helped negotiate changes favoring the franchisee.