Expert Franchise Law Services: Your Strategic Legal Partner
FBLG Law
Expert Franchise Law Services
Franchising is a highly regulated and structured type of license that comes about when a business offers the opportunity to use the business’s trademark and other intellectual property. Due to complex FTC regulations and various state laws, it is important to consult with a knowledgeable franchise attorney when considering franchising your business.
At The Franchise & Business Law Group, we help our clients determine not only if franchising is the right method for expanding their business, but how to structure their franchise to comply with the various federal and state laws. We help our franchise clients in developing their system, drafting the FDD and all the contracts included in the FDD like the franchise agreement and area development agreement, securing federal trademark registrations, and assisting with registration in the various franchise registration states.
When using the experienced attorneys with The Franchise & Business Law Group, you can be confident you are using the right team to help with all of your franchise needs.
Other Franchise Law Services
In addition to franchise disclosure documents and agreements, Franchise Business Law Group offers a full suite of legal services to support your franchise journey.
Our expertise includes regulatory compliance, dispute resolution, mergers and acquisitions, franchise resale, and corporate structuring. We help franchisors and franchisees navigate intellectual property protections, employment policies, and state registrations. Whether you’re expanding nationally, facing litigation, or restructuring your franchise model, we deliver strategic legal guidance to protect your brand and accelerate growth.
Trust us to provide practical, responsive, and experienced legal solutions tailored to the evolving needs of your franchise business.
What is the FDD
If you’re considering franchising your business, one of your first major legal steps is preparing a Franchise Disclosure Document (FDD). This isn’t just paperwork, the FDD contains specific disclosures required under the Federal Trade Commission’s Franchise Rule.
The FDD gives potential franchisees a detailed look at the franchise before they commit to purchase a franchise. It includes 23 specific sections of disclosures called Items covering everything from the franchisor’s background, initial and ongoing fees, the franchisee’s total initial investment costs, initial training, territory rights, financial performance representations and more. It also includes audited financials of the franchisor’s entity, and the FDD also include the franchise agreement and any other agreements the franchisee is required to sign. The goal with the FDD is transparency, so that buyers can make an informed decision whether to purchase a franchise.
But the FDD is not the same as the franchise agreement. The FDD is a disclosure tool, and the franchise agreement a binding agreement between the franchisor and franchisee. Think of the FDD as the “what to know,” and the franchise agreement as the “what the franchisee is agreeing to.”
At The Franchise & Business Law Group, we help business owners understand both documents, so that both the franchisor and franchisee understand what rights and responsibilities they will each have as part of the franchise relationship. Whether you are a business owner looking at franchising your business and need to draft an FDD, or if you are a prospective franchisee looking to better understand the FDD, The Franchise & Business Law Group and its experienced team can help you.
FDD & Franchise Agreements
The FTC and 25 states regulate business opportunities, and the franchising lawyers at the Franchise & Business Law Group has helped set up business opportunities that keep our clients’ needs at the forefront—providing them with a state-specific franchise disclosure document, a contract or agreement to purchase the opportunity, and other related documents and requirements, such as intercompany license agreements, trademark registration and entity formation. Contact our franchising lawyers today for a free consultation.
Franchise Documents to Review
If you have any experience starting a business, you’re probably familiar with the volume of paperwork involved in the process. Various documents must be carefully reviewed and signed before legally operating a business, and franchising is no different. A franchised business is heavily regulated by the FTC, who set clear guidelines for both parties in the relationship—the franchisor and franchisee.
As a potential franchisee, you’ll be expected to review and agree upon several documents before obtaining the right to operate under the franchise. Two critical documents are known as the Franchise Agreement and Franchise Disclosure Document (FDD). Although they appear to be similar, they serve two distinct purposes:
- Franchise Disclosure Document – The FTC mandates that a franchisor provides this document to the franchisee at least 14 days before the Franchise Agreement is signed or before fees are accepted for the sale. This disclosure period is meant to allow the franchisee to properly review the FDD with a franchise attorney. The prospective franchisee should be properly educated about the franchise after reviewing this document. You can learn more about the 23 items of an FDD by visiting the Federal Trade Commission’s website and reading “A Consumer’s Guide to Buying a Franchise.”
- Franchise Agreement – This is the legal document signed by both the franchisor and franchisee. It states that the franchisee has the right to operate its business while using the franchisor’s resources such as its trademark, suppliers, and more. It also defines both parties’ obligations. The franchisee will agree to certain terms about where it can operate and how it should manage royalties and marketing duties. In return, the franchisor will be obligated to provide a certain level of support and training.
Partner With an Experienced Franchise Attorney
Whether you’re looking to become a franchisee or you want to expand your business into a franchise, the attorneys at Franchise & Business Law Group are here to help. Our team is well experienced in franchise law, so you can be confident in knowing that the Franchise Disclosure Document and Franchise Agreement are carefully reviewed. Contact our franchise attorneys today to schedule a free consultation.
(FDD): A 23-Part Guide Items 1-4
These first four Items of the FDD provide a basic understanding of the franchisor, the franchise system, the franchisor’s officers, affiliated companies, and their respective litigation and bankruptcy histories.
Item 1: The Franchisor and Its Affiliates
Item 1 introduces the franchise company to potential franchisees and provides background on other businesses that could be related to the franchise company such as a parent company or affiliated businesses. It also describes how long the franchise company has been in business and what the franchise system offers.
Item 2: Business Experience
This section discloses the professional backgrounds of the franchisor’s leadership and management team. It is meant to provide franchisees with information about the people running the system and their experience to support the franchisees and system.
Item 3: Litigation
If the franchise company, an affiliated company, or any of the individuals in Item 2 have been involved in lawsuits, this section lays it out. Transparency is key.Item 4: Bankruptcy
Franchisees must be told if the franchisor or its key people have filed for bankruptcy in the past 10 years.
(FDD): A 23-Part Guide Items 5-10
What is a franchisee required to pay both to the franchisor initially and on an ongoing basis, and how much will it cost to start operating? These and other questions are answered in Items 5 through 10 of the FDD.
Item 5: Initial Fees
Every prospective franchisee wants to know what upfront and ongoing franchise fees will be required to be part of the franchise system. Item 5 spells out the upfront costs to buy into a franchise, and include the initial franchise fee and any other pre-opening payments paid to the franchisor or an affiliate of the franchisor.
Item 6: Other Fees
Beyond startup costs, franchisees want to know what they will be required to pay on an ongoing basis, and Item 6 is meant to give a clear understanding of future and ongoing fees. The ongoing fees include royalties, advertising contributions, tech fees, late fees, transfer fees, etc.
Item 7: Estimated Initial Investment
Item 7 gives franchisees a complete picture of the total costs to open and begin operating the franchise. It includes costs such as real estate, equipment, inventory, working capital, and more. The FTC requires this to be presented as a detailed table, and the information presented assists prospective to determine their total upfront investment.
Item 8: Restrictions on Sources of Products and Services
Franchisees are often required to buy certain products or use certain suppliers and Item 8 summarizes these requirements. Item 8 also discloses whether the franchisor’s officers have an ownership in any of the approved suppliers.
Item 9: Franchisee’s Obligations
This item summarizes all the key obligations the franchisee takes on under the franchise agreement, from site selection to training and insurance. Item 9 provides references to the corresponding sections in the franchise agreement in a helpful table.
Item 10: Financing
If the franchisor offers any kind of financing, whether for the franchise fee, equipment, or anything else, the terms will need to be disclosed in Item 10.
(FDD): A 23-Part Guide Items 11 & 12
These two Items are often seen as the meat and potatoes provisions of the FDD because they set out the ongoing obligations of both the franchisor and the franchisee and give information about what kind of territory and minimum sales or revenues are required.
Item 11: Franchisor’s Assistance, Advertising, Computer Systems, and Training
This section details what support franchisors provide from signing the franchise agreement through the end of term of the agreement. From site selection and training to tech systems and marketing help, this item is intended to provide prospective franchisees with the information as to how their franchise business will operate. These ongoing obligations are at the heart of the franchise relationship, and Item 11 is intended to let the franchisee know clearly what the franchisor agrees to provide and what the franchisee is obligated to do during the term of the franchise relationship.
Item 12: Territory
Do franchisees get an exclusive or non-exclusive territory? Item 12 answers these questions and provides information on any reservation of rights reserved to the franchisor such as development in non-traditional territories (e.g., sports arenas, malls, university campuses, etc.), handling national accounts, and online product sales. Item 12 also spells out any minimum sales or revenue standards imposed on franchisees and what happens if a franchisee fails to meet those standards.
(FDD): A 23-Part Guide Items 13 & 14
These two Items provide prospective franchisees with crucial information regarding the intellectual property associated with the franchise system and licensed to the franchisee through the franchise agreement.
Item 13: Trademarks
The brand is one of the primary assets in franchising, and Item 13 helps franchisees to see whether the franchisor has legally protected its trademarks. This Item discloses which trademarks a franchisee is allowed to use, and whether the trademarks are registered with the USPTO. It also provides details on the franchisor’s obligation to protect both the trademarks and how the franchisor may defend against infringement claims, or whether the franchisee may defend itself against infringement claims.
Item 14: Patents, Copyrights, and Confidential Information
Item 14 discloses whether the franchisor has any patents, copyrights and confidential information that gives the franchise brand a competitive edge, e.g., proprietary recipes, software, processes, etc., and how franchisees can use this information, including obligations on the franchisee and franchisor to defend against infringement claims.
(FDD): A 23-Part Guide Items 15 -18
Item 15: Obligation to Participate in the Actual Operation
Item 15 discloses who needs to be involved in management and supervision of the franchisee’s business. Some franchise systems require owner-operators and others allow for absentee owners. Item 15 also addresses requirements for days and hours of operations for the franchisee’s business, and whether franchisees operate a competitive business.
Item 16: Restrictions on What the Franchisee May Sell
Item 16 discloses whether the franchisee must carry and sell only the products and services dictated by the franchisor. It also discloses whether the franchisor puts any restrictions on a franchisee’s ability to service customers.
Item 17: Renewal, Termination, Transfer, and Dispute Resolution
Item 17 is set out in table form that references sections in the franchise agreement, and outlines how the franchise agreement can be renewed, terminated, or transferred, any non-competition provisions, and how disputes between the franchisor and franchisee will be resolved.
Item 18: Public Figures
Do you have a celebrity or public figure promoting your brand? If so, you need to disclose the basic terms of the arrangement and which celebrity is promoting your brand in Item 18.
(FDD): A 23-Part Guide Item 19
Item 19: Financial Performance Representations (FPRs)
Item 19 is the only optional disclosure in the Franchise Disclosure Document, but it carries significant weight. It allows a franchisor to share historical or projected financial data about franchise operations, such as average gross sales, revenue ranges, or cost breakdowns. While inclusion is not required, many prospective franchisees view an Item 19 FPR as a key factor in evaluating the franchise opportunity.
If financial performance data is provided, it must be accurate, clearly explained, and supported by verifiable records. Improper or misleading FPRs are among the most frequently challenged and litigated items in franchise law. The language must be carefully drafted to comply with federal regulations and to reflect performance data in a responsible, transparent manner.
When done correctly, a well-crafted FPR can enhance credibility and attract qualified candidates. However, if done poorly, it can expose a franchisor to legal risk and franchisee dissatisfaction. Legal counsel plays a vital role in shaping FPR disclosures that are both compliant and strategically effective.
If no Item 19 FPR is provided, a franchisor cannot provide any financial information related to historical or projected sales, profits, or other financial data for the franchisor or any individual franchisee. This restriction applies to both the franchisor as well as all agents, brokers, and franchise sales people involved in the sale of the franchise.
(FDD): A 23-Part Guide Items 20-23
The last four items of the FDD provide a 3-year history related to the operational history of franchisees and financials for the franchisor, as well as an outline of each contract a franchisee will be required to sign.
Item 20: Outlets and Franchisee Information
Item 20 includes five tables that set out the total number of franchises and company-owned locations that were sold, opened, closed and transferred in the franchisor’s previous three years. Item 20 also discloses the franchisor’s anticipated franchise and corporate openings for the current year. Item 20 also includes a list of all current franchisees and those franchisees that left the system in the previous year.
Item 21: Financial Statements
Item 21 includes the franchisor’s audited financials for the prior three years. In some instances, a startup franchisor may be allowed to ‘phase in’ the audited financials but in all instances, starting in the third year of offering franchises, a franchisor is required to include audited financials that adhere to GAAP standards and that meet specific requirements.
Item 22: Contracts
Item 22 lists the actual agreements that franchisees are required to sign if they purchase the franchise. A copy of each of these agreements need to be attached to the FDD.
Item 23: Receipt
Item 23 refers to the last two pages of the FDD in duplicate called the “Receipt Page.” The two receipt pages are required to be signed and dated when the FDD is provided to a prospective franchisee, and the date of signing marks the start of the 14-day waiting period before franchisees can sign the franchise agreement or pay any money.
Entity
When forming a company, it is important to look at the different types of entities to determine which entity type will best suit your needs. Generally, the size of a business is an important consideration. Generally, businesses with a large number of employees, multiple owners, and a significant capital investment generally find that forming a corporation offers the most significant benefits. Whereas, smaller businesses are more likely to benefit from an LLC or an S-Corporation. We will file you articles of organization/incorporation with the state and obtain a federal employment identification number (EIN) for your company.
For most incorporations and LLC’s, we charge a flat fee. More complicated matters require more attorney time, and in such circumstances an hourly fee is charged.
A FEW OF OUR SERVICES INCLUDE FORMING THE FOLLOWING ENTITIES:
- C Corporation
- S Corporation
- Professional Corporation
- Limited Liability Company (LLC)
- Professional Limited Liability Company (PLLC)
- Limited Liability Partnership (LLP)
- Limited Partnership (LP)
- General Partnership
- Joint Venture
- Non-Profit Corporation
CHOOSING THE RIGHT ENTITY
If you are starting or expanding your business, you need to decide the most effective entity form to use. Knowing all the components of each type of business will help you determine which type of entity is best for you. Below is an overview of the various business forms with some of the key factors to be considered. For additional resources to determine which type of entity is best for your business, read the article “Should I Incorporate?” on our blog.
Franchisee Attorney Guide
How Can a Franchisee Attorney Help.
Choosing the right franchisee attorney is key to making a smart investment. A good franchise attorney doesn’t just skim the Franchise Disclosure Document (FDD) or Franchise Agreement; they break it down, explain what matters most, and point out any red flags. They help you understand your obligations, fees, territory rights, renewal terms, and what happens if things go wrong. More importantly, they can spot hidden risks and help you negotiate better terms before you sign.
At The Franchise & Business Law Group, we work with franchisees at every stage, from reviewing the FDD to explaining the fine print in plain English. We make sure you fully understand what you’re getting into, and we’re here to protect your interests so you can build your business with confidence.
Area Development Agreements
What Is an Area Development Agreement?
An Area Development Agreement is a contract that gives a franchisee the right along with the responsibility, to open and operate multiple franchise locations within a set territory over a certain period of time. It’s a great option for experienced business owners looking to grow fast under a proven brand.
With this kind of agreement, the developer doesn’t sell franchises or oversee other franchisees. Instead, the developer is committing to personally develop and run each unit. The franchisor benefits by partnering with someone serious about scaling, and the developer usually gets some territorial protections and a set schedule to grow.
At The Franchise & Business Law Group, we help both franchisors and developers structure area development deals that make sense -covering key points like development timelines, territory rights, and what happens if deadlines aren’t met. We cut through the complexity and make sure your agreement supports long-term success.
Area Representative Agreements
An Area Representative Agreement allows someone to help a franchisor grow in a specific region by recruiting new franchisees and supporting them after they sign on to be a franchisee. Unlike an area developer or single unit franchisee, the area representative typically doesn’t run the franchise units in their territory or area themselves; they act more like a local partner who helps manage the brand’s growth.
In return, the area representative often earns a share of the franchise fees and royalties from the locations they help open and support. It’s a way for franchisors to expand quickly without having to manage every location directly.
At The Franchise & Business Law Group, we help clients draft and negotiate area representative agreements that clearly define roles, income sharing, and territory rights, while also making sure everything lines up with federal and state franchise laws. We make the legal side easy, so you can focus on growing the business.
Business Opportunities
A business opportunity is a type of investment where someone sells you the tools, services, or system to start your own business—often with a promise to help you get started, such as finding customers or a location. Unlike a franchise, business opportunities usually don’t include the right to use a brand name or ongoing support, and there’s less control from the seller over how you run your business.
Several states have special laws that require sellers of business opportunities to register or make certain disclosures. These laws are designed to protect buyers from scams or misleading claims. However, if a business follows federal franchise rules and provides a Franchise Disclosure Document (FDD), many states will exempt it from separate business opportunity rules—but some still require a simple notice filing.
At The Franchise & Business Law Group, we help clients understand whether their offering qualifies as a franchise, a business opportunity, or both—and what steps they need to take to stay compliant. Whether you’re launching a system or buying into one, knowing the difference matters. Let us help you avoid legal headaches and set up your business on solid ground.
Frequently Asked Questions
What does a franchise lawyer do?
A franchise lawyer helps you navigate the legal requirements of the FTC and state regulators. This includes drafting the FDD, registering your trademarks, and ensuring your franchise agreements protect your brand.
Is it expensive to hire a franchise law firm?
While there are costs involved in proper legal setup, failing to comply with franchise law can lead to massive fines and the forced rescission of your contracts. Our firm offers competitive pricing and flat fees for many of our core services.
How often does my FDD need to be updated?
Federal law requires an annual update of your FDD within 120 days of your fiscal year-end. Many states also require annual renewal filings to keep your registration active.
FBLG Law
We've Been Busy
Our attorneys are honored to be the recipient of multiple national and state awards. Since 2014 The Franchise & Business Law Group has been awarded with the US News Best Law Firms for Franchise Law; for the second consecutive year, The Franchise & Business Law Group has been awarded “Best of State” for legal services in the State of Utah, and our attorneys are recognized as Super Lawyers, Best Lawyers, Legal Eagles, and as Utah Legal Elite by Utah Business Magazine, among other awards and honors. Choosing the right franchise attorney is key to making a smart investment.
A good lawyer does not just skim your documents. They break them down, point out red flags, and negotiate better terms to protect your interests. Our team members are recognized as Super Lawyers and Legal Eagles, providing you with the confidence that you are working with the right team.
