Franchise Law

Services for Franchisors

Sakhia Law Group assists franchisors with matters ranging from the development of franchise business programs and the structuring of franchise business entities to maximize business flexibility and protect assets, to the preparation and registration (where required) of franchise disclosure documents (FDDs) as well as the filing of trademarks and the management of licensing and intellectual property.

 Services for Franchisees

We provide an equally broad range of services to franchisees: assisting single unit operators and multi-unit operators with acquiring and selling franchises and territories; reviewing FDDs; reviewing and negotiating franchise agreements, multi-unit and area development agreements, leases and other contracts; forming business entities; and in the formation and representation of franchisee associations.

Franchise Dispute Resolution

Our firm bring these same qualities to resolving franchise disputes on behalf of franchisors, franchisees and franchisee associations for clients locally and throughout the U.S. Our firm engages in matters in state and federal courts as well as through arbitration and mediation, when appropriate.

 Services For Franchisors

Sakhia Law Group prides in representing both start-up and established franchisors. Our firm provides a full range of services in all aspects of developing, registering, offering for sale, operating, restructuring and expanding franchisor businesses. We represent clients who offer franchises nationally, including international franchisors, in a variety of industries, including restaurant services, fashion businesses, home maintenance and improvement, hotel and lodging, business services, technology, real estate, pet food and pet care, professional services and child care services.

For start-ups, we assist in (i) determining whether franchising is the proper method to further develop a business, (ii) creating a franchise program, (iii) drafting franchise disclosure documents (FDD) and other franchise-related agreements, and (iv) preparing and filing disclosure documents for state registration where necessary.

For existing franchisors, we conduct a comprehensive review of the franchisor’s current disclosure document and related agreements to (i) make certain that the agreements are current and state of the art both legally and technically, (ii) ensure that the franchisor has complied with all state and federal regulations and (iii) create agreements that help insulate the franchisor from problems that often arise during the franchisor-franchisee relationship.

For all franchisor clients, we provide the full range of legal services:

  • Preparation and registration of FDDs
  • Preparation of a detailed memorandum analyzing the franchisor’s current disclosure document and agreements along with proposed modifications
  • All matters relating to franchise law compliance and the development of an in-house compliance department
  • Negotiating and closing franchise sales
  • All matters relating to the franchisor-franchisee relationship, including dispute avoidance and resolution
  • Drafting any and all agreements
  • The best methods to protect and license trademarks, trade secrets and other intellectual property
  • All real estate matters, including property acquisition, leases and subleases and drafting agreements with third parties
  • Methods to minimize legal and business risk exposure in connection with the franchise system
  • The development of the optimal corporate structure for enabling the franchisor and its affiliates to separate their various streams of revenue from one another, thereby shielding valuable assets from possible litigation
  • Day-to-day business counseling

 Franchisor Litigation & Alternative Dispute Resolution

We represent franchisors in litigation , as well as in arbitration and mediation, throughout the U.S. On behalf of franchisor clients, we bring claims against franchisees to enforce non-competition and non-disclosure agreements, to protect the franchisor’s trademarks, services marks, trade dress and other intellectual property, and defended franchisor clients in actions brought by franchisees relating to alleged breaches of franchise agreements and violations of disclosure laws.

Can your business be franchised?

To help you determine whether you can franchise your business, we suggest that you think about the following:

Question #1: Do you have a proven business concept?

Potential franchisees want to know that your franchise business concept has proven to be successful. Success can be measured in many different ways, including the profitability of your business, the number of years you have operated your business, the number of units you have operated, the size of your operation, and the strength and awareness of your brand.

Question #2: Do you have a strong brand?

Franchising is a method of expanding your business by granting to a franchisee the license to operate a franchise using your trade name, trademark and trade dress. Other than the value of the knowledge of how to operate your business, much of the value associated with purchasing a franchise is attributed to the strength of the brand. At Einbinder Dunn & Goniea, we can register your trademark and help develop the legal framework to protect and strengthen your brand.

 Question #3: Is your business concept different from current businesses in the marketplace?

You can differentiate your business in many ways, including offering unique products and/or services, offering products and services at reduced prices, offering higher quality products or services, targeting different markets, or implementing a distinctive marketing strategy.

 Question #4: Can you teach others how to operate your business?

One of the keys to franchising is teaching franchisees how to replicate the way you operate your business. The easier it is to teach your proven business methods to a franchisee, the quicker it is for that franchisee to be up and running, and the more likely that franchisee will be able to duplicate the success of your business.

 Question #5: Does your business have regional, national and/or international appeal?

The more marketable your franchise system is across various geographic areas, the greater the chance of success for your franchise system. Some franchise concepts do not work as well in certain geographic areas as they do in others. It is important to understand how marketable your franchise concept is and what geographic areas your franchise concept would appeal to. This market analysis would help you maximize the potential of your franchise system in those geographic areas that your franchise would operate in.

Question #6: Do you have a strong management team in place?

Running a franchise system involves a different skill set than operating your current business. To develop a successful franchise system, you will need, for example, personnel who can conduct the training program, employees who are knowledgeable in marketing and building brand awareness, and a sales staff to generate leads for potential franchisees as well as potential customers for the franchise system.

Franchise Disclosure Documents (FDD) and Registration

The law governing franchise disclosure is complex and evolving, requiring the attention of a firm with dynamic experience. We assist start-up and established franchisors nationwide in complying with franchise disclosure and registration requirements. The Federal Trade Commission’s (FTC) franchise rule, as amended in 2007, requires franchisors to prepare and provide to a prospective franchisee a franchise disclosure document (FDD) within a specified period of time before completing the sale of a franchise to that prospective franchisee. Certain states require that the FDD be registered.

Our firm prepares FDDs as required by the FTC including related agreements to ensure that franchisor clients have complied with all applicable state and federal regulations, including various disclosure timing requirements. We also represents franchisors in complying with registration requirements in the 13 states (California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin) where such registrations are required before the FDD can be disseminated to potential franchisees and used to sell a franchise in that state. In addition, there are several other states, such as Florida, that require franchisors to file documents with that state or provide that state with notice before selling a franchise there. We also assist in such filings.

For established franchisors, our firm assists clients with ongoing registration requirements and filing of annual reports.

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