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What Does a Franchise Attorney Do?

Similar to a small business attorney, a franchise lawyer is an invaluable asset for entrepreneurs needing advice for the legal aspect of a business. A franchise is an authorization by an established company to a potential investor to permit them to sell its products, goods, or services under its brand name. Within this agreement, there are many requirements and regulations to ensure a legal transaction and licensing. This is where a specialized attorney, known as a franchise attorney, is critical and advantageous. –Both the franchisor and franchisee should have a trusted franchise lawyer in their portfolio for protecting themselves during the life of the franchise.

Franchising contains a unique aspect of the law, as it is a combination of federal and state regulations that intervene between the relationship of the franchisor and the franchisee. A franchise attorney has specific experience and knowledge to help either party in determining what is the best outcome for them. Below are a few different roles a franchise lawyer engages in while representing a franchisor or franchisee.

What Does a Franchise Attorney Do?
What Does a Franchise Attorney Do?

Prepare & Review FDDs

One of the keys to success in any franchise negotiation is a proper Franchise Disclosure Document (FDD). With twenty-three mandatory items on this legal document, it is in the franchisee’s best interest to have an experienced franchise attorney look over the 100–200-page document. The FDD will spell out each potential obligation that could be presented while owning the franchise, giving the franchisee a clearer picture of what the new ownership will entail.

Due Diligence

Not only will a franchise attorney review the FDD itself, but the attorney will also commit to due diligence by researching franchisors when representing a cline in the purchase of a franchise. After reviewing the FDD, experienced franchise attorneys will research actual court records through PACER (federal court records) as well as general state records. In the due diligence process, attorneys will search for any other sources that may be of value to the franchise negotiation, such as the franchise’s management team, press releases, and any other news. This procedure will enable the franchisee to feel confident in their decision to move forward in buying a franchise as they gain all relevant data.

Handle Conflict with Franchisors

After reviewing and signing the Franchise Disclosure Document, the franchisee should have a good foundation of what the franchisor’s typical obligations and requirements will entail. However, in the unfortunate circumstance that a franchisor does not follow through with guarantees or promises, the business relationship can easily be fractured. Having a franchise attorney advocating for you will ensure representation against a franchisor’s unfair or deceptive business practices, which might be a violation of the anti-trust statute, G.S. § 75-1.1. Understanding your rights and responsibilities as a franchisee or franchisor is significant. Overall, franchise lawyers can help navigate you through the process to protect your best interests while staying within legal boundaries.

DYE CULIK PC is a Charlotte, North Carolina small business and franchise law firm. Our attorneys represent franchisees through every step of owning a franchise. Give us a call at 980-999-3557 and tell us about your franchise. Follow us on Instagram for the latest updates on CLT small businesses.


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