A franchise is, at its core, a contract. However, franchise law incorporates many areas of substantive law and cases, statutes, and regulations at both the federal and state levels. To navigate this complex field of law, both franchisors and franchisees benefit from the assistance of a franchise business lawyer.
What Does a Franchise Business Lawyer Do?
Utah does not certify legal specialists. Thus, a franchise business lawyer is someone who focuses on franchising transactions and, as a result, has gained knowledge and experience in franchising law.
Expertise in Franchise Law
A franchise business lawyer knows basic legal principles, such as contract law and administrative law. However, they also have experience and knowledge working with the specific laws that govern franchise relationships.
The U.S. Federal Trade Commission’s (FTC) Franchise Rule sits at the heart of franchising transactions in the U.S. Its various aspects have been litigated extensively in federal courts, with the FTC bringing hundreds of cases against franchisors who allegedly violated the rule. The FTC has issued 29 advisory opinions and a lengthy compliance guide interpreting the Franchise Rule.
In short, the amount of information to digest about the Franchise Rule is huge and a franchise business attorney can help you navigate it.
Franchise Business Lawyers Know Their State’s Franchising Laws
States limit the scope of their franchising laws due to federal preemption. However, some states can, and do, impose filing and registration requirements on franchisors offering franchises in their state.
When a franchisor fails to comply with these rules, state regulators can impose fines. Depending on the state, regulators or franchisees can also ask a court to void non-compliant franchise agreements and order the franchisor to return franchise fees. Some states even impose criminal liability on franchisors that fail to comply with registration or filing rules.
Having a franchise business lawyer in each state where a franchisor grants franchises can minimize the risk of non-compliance with state franchising laws.
Franchise Business Lawyers Represent Their Clients’ Interests
A common mistake by both franchisors and franchisees is to rely on each other for legal advice. While developing a relationship of trust is important, asking the other party for legal advice during a franchise transaction is a recipe for a lawsuit over the final franchise agreement. Specifically, any inaccurate representation made to the other party could trigger accusations of fraud. As such, both parties should be represented by a franchise business lawyer to protect their separate interests and verify that any representations are supported by the agreement.
Leveraging a Franchise Business Lawyer’s Knowledge and Experience
Calling a franchise business lawyer when you are negotiating an agreement is like calling a cardiologist when you have chest pain. A generalist knows the basics, but to really understand the issues requires the knowledge and experience that a focused practice can bring.
Contact us to talk to a franchise business lawyer who can represent you whether you are a franchisor or a franchisee.