FRANCHISE ATTORNEY

Raich Law can help franchisees, dealers, distributors, and other small business owners protect and strengthen a business’ value.

BUYING A FRANCHISE

Raich Law can help franchisees, dealers, distributors, and other small business owners protect and strengthen a business’ value. 

For many entrepreneurs, the prospect of owning a self-sustaining business with continuous support from the franchisor is a very appealing business format. However, operating a profitable franchise involves a lot of hard work. A Raich Law franchise attorney can help you navigate the preliminary steps necessary for starting a franchise operation, such as reviewing the Franchise Disclosure Documents (FDDs) provided by franchisors. The FDD includes informational terms that will educate a prospective franchisee on the franchisor and their system of operation. It will also establish whether the franchise agreement offered is proven and profitable in general, or whether it is unproven and carries a degree of risk. 

The FDD is generally between 150 – 200 pages and includes:

  • The amount of experience of your franchisor 
  • The obligations of the franchisor, before and after, the opening of your business
  • Initial fees and continuing fees you will be required to pay
  • If any financing arrangements are provided and what they are
  • An explanation of the startup costs involved in the initial investment before and after opening the business

The purpose of the FDD is to disclose everything that the Federal Trade Commission (FTC) requires you to know regarding your potential franchisor. There may be specific restrictions and obligations for a franchisee and termination may occur if you don’t adhere to them. Because of this, it’s vitally important to have a thorough understanding of the FDD.

Raich Law will examine the disclosures covered in your FDD, as well as the terms of your proposed  franchise agreement before you commit to the franchisor. Although franchise agreements are generally more beneficial to the franchisor, some franchise agreements may be unusually egregious or unfair to the franchisee. Most franchisors will be willing to review and re-negotiate certain terms, especially if they do not involve well-established procedures and operations, or jeopardize their trademarks. Your Raich Law attorney will identify any problematic conditions and suggest negotiating more advantageous terms. We know what to focus on in the FDD, as well as the franchise contract. We keep up to date on franchise laws. 

Your Raich Law attorney will also advise you regarding how your new franchise business should be set up. Whether it’s a Limited Liability Corporation (LLC), a Subchapter S Corporation, or C-Corporation, choosing the right business entity for your new franchise is key to positioning you for success. Your entity formation determines your legal rights and liabilities as a business owner. It will also affect how your new business is taxed.

Legal representation by Raich Law will benefit you in the event of any concerns that arise after signing your franchise agreement as well as any that emerge during your franchise operation. Franchise owners lacking legal representation are sometimes unable to resolve issues and lose influence with their franchisor, sometimes as a result of contractual limitations periods or state statute of limitations. 

It’s vital that franchisees do not obtain their legal advice from their franchisors. Some franchise owners are unaware of the risks of seeking legal advice from their franchisor, but it is common for a franchisor’s legal position to be in direct opposition to the interests of the franchisee. Raich Law will work to ensure protection of your legal rights. Contact us for a consultation: info@raichattorneys.com or call our offices at (702) 758-4240.

SELLING A FRANCHISE

Raich Law can help franchisors, dealers, distributors, and other small business owners protect and strengthen a business’ value. 

Many businesses are successful in a way that may be suited for expansion through franchising. A franchise is the ability for the franchisor (person/entity who started the concept and has developed it into a replicable business model) to work with a franchisee (someone who wants to replicate the model of the franchisor) in growing the business for mutual benefit of both parties.

A Raich Law franchise attorney can help you navigate the preliminary steps necessary for starting a franchisor operation, such as drafting the Franchise Disclosure Documents (FDDs). The FDD includes informational terms that will educate a prospective franchisee on the franchisor and their system of operation. It will also establish whether the franchise agreement offered is proven and profitable in general, or whether it is unproven and carries a degree of risk. 

The FDD is generally between 150 – 200 pages and includes:

  • The amount of experience of the franchisor 
  • The obligations of the franchisor, before and after the opening of the franchised business
  • Initial fees and continuing fees to be paid by franchisee
  • If any financing arrangements are provided and what they are
  • An explanation of the startup costs involved in the initial investment before and after opening the business

The purpose of the FDD is to disclose everything that the Federal Trade Commission (FTC) requires you to disclose to your potential franchisee. There may be specific restrictions and obligations that must be included and termination may occur if you don’t adhere to them. Because of this, it’s vitally important to have a thorough understanding of and a bullet-proof FDD.

Raich Law will examine the disclosures covered in your FDD, as well as the terms of your proposed  franchise agreement before you commit to the franchisee. We can also help set up standard operating procedures (SOPs) in selection of potential franchisees in accordance with current law and and can also help set up the other policies, procedures, licensing, and other agreements that would need to be had between you and potential franchisees.

Protect your business, while you grow it with control. Raich Law will work to ensure protection of your legal rights. Contact us for a consultation: info@raichattorneys.com or call our offices at (702) 758-4240.

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