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What makes a Franchise a "Franchise"?

Franchising occurs anytime the following three elements are present:

Right to Operate

The buyer will obtain the right to operate a business that is identified or associated with the seller’s trademark, or to offer, sell, or distribute goods, services, or commodities that are identified or associated with the franchisor’s trademark

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Degree of control

The seller will exert or has authority to exert a significant degree of control over the buyer’s method of operation, or provide significant assistance in the buyer’s method of operation

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Exchange of money

As a condition of obtaining or commencing operation of the business, the buyer makes a required payment or commits to make a required payment to the seller or its affiliate. In Virginia, this includes any direct or indirect payment of at least $500. 

If these three elements are present, its a franchise!  This is true regardless of what the parties call the arrangement and regardless of rather the agreement is written or oral.  Its important to work with trained legal counsel to understand what satisfies these elements and ensure you either franchise correct way or do not accidentally franchise. The consequences of illegal franchising can be severe.  

Franchise legal support

Searching for the legal support needed to franchise your business or purchase a franchised business? You came to the right place.  Waldrop & Colvin is a franchise focused law firm. Our attorneys excel at helping franchisors and franchisees navigate the business of franchising. 

Franchisor Legal Support

Franchising can lead to exceptional business growth. Planning for success requires business and legal planning. Our goal is to provide a full range of business legal support to successful businesses looking to expand through franchising. If you want to share your brand with the world, we can help you plan for success and execute.  We support franchisors at every stage of the journey.  

Franchisee Legal Support

We support entrepreneurs as buyers and sellers. Purchasing a franchise opportunity can help reduce risk through brand recognition and proven systems and processes. Evaluating the opportunity requires guidance and knowledge of business and franchise law. We support franchisees as business minded attorneys. 

Legal guides and Resources

We only provide legal advice to our clients, but we have generated a great deal of content for our website to help the franchise community and illustrate why important it is to engage a competent franchise attorney. Our website is packed full of know-how and real life experience for you to review before you’re ready to move forward.  When you are ready to franchise, we invite you to schedule a free consultation.  Explore some of our guides and resources:

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We focus on results and work hard to deliver solutions. Let us serve as the law department for your business. 

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