Franchising is an established growth strategy that can lead to explosive growth with proper vision and execution. The attorneys Waldrop & Colvin work hard to understand our Client's goals and objectives and navigate them through the development of a franchised business. Franchising is regulated on the federal and state level. Understanding the nuances of franchise law and compliance shouldn't consume all your time. Let us focus on the legal work while you focus on the business. Just starting out? Learn how to franchise your business.
We want to understand our clients and we want to understand their business and their competition. We strive to be among the best franchise attorneys. We provide face-to-face consultation in person or by video conferencing. The human element helps us ensure the legal documents actually meet your needs. Once we understand your goals and objectives we will develop your disclosure document by working together and engaging in open, honest, and ongoing communication throughout the process. We are accessible by text, call, video conference, in person-meetings, or email.
We work with franchisors on a daily basis. We have facilitated rollups, acquisitions and joint ventures to develop franchised brands. We believe your legal team should be looked at as an asset to your business and should be accessible to provide strategic guidance. We are focused on providing business legal solutions.
We will prepare your franchise disclosure document ("FDD") from start to finish. We will explain the consequences of legal provisions, explore options, and give our best legal guidance. We strive to make the process smooth, personable and user-friendly. Your FDD will include a franchise agreement for you to use in your offering that implements the model established in your disclosure document. Once you approve a final draft of the FDD, it will be issued by us. This means that you can start offering and selling franchises in non-registration / non-filing states. Learn more about franchise law requirements here. We also prepare any periodic and annual updates required by the law.
Once we have issued a disclosure document we can begin the approval process for any states that regulate the offer or sale of a franchise. We will explain the process and cost of registration in each state. You decide where to register. Once a state approves the offering, we comply with any annual or periodic state reporting requirements. Maintaining the disclosure document is an ongoing legal obligation for franchisors. We are accessible and available throughout the process.
We offer a full platform of support for your franchising needs. We can manage the disclosure of the FDD to ensure compliance, prepare franchise agreements, and manage all required reports and renewal filings. We manage franchise relations, advice on best practices, and help avoid disputes. The level of support your business needs is up to you; however, we typically provide complete support to franchisors on a fair monthly fixed-fee.
Franchise law consists of federal and state laws that govern the offer or sale of a franchise in the United States. On the federal level, the Federal Trade Commission has established Franchise Rules (16 CFR Parts 436 and 437). The Franchise Rules are supplemented by laws enacted in certain states. Additionally, the North American Securities Administrators Association ("NASAA") provides guidance on franchise compliance, works with state regulators, and facilitates the transfer of franchise applications to certain state governments. Check out the Table Below Entitled "Franchising State-by-State" for a current list and brief explanation.
A Franchisor cannot offer or sale a franchised business in the United States or its territories without first preparing a complete Franchise Disclosure Document ("FDD") in compliance with the law.
The Franchise Disclosure Document, commonly referred to as the FDD, is a legal document that franchisors are required to prepare annually and provide to prospective buyers interested in operating a franchised business. The FDD is intended to provide information about the franchisor, the franchise system and the agreements that will bind the Franchisor/Franchisee relationship.
Pursuant to the Federal Trade Commission each Franchise Disclosure Document must contain 23 specific items of information:
Additionally, the FDD must include a copy of the Franchise Agreement and specific documents to comply with regulatory and state requirements.
Absolutely. We provide the level of support and advice you want. We can analyze any competitors who offer franchises and provide you with the information you need to understand competitor's models, costs, territory sizes, and growth rates.
Pursuant to federal law, a franchisor is required to update the FDD within 120 days of the franchisors fiscal year end. In registration states, the new FDD has to be approved in order to be effective in that state. Additionally, the FDD must be updated any time there is a material change in the franchise business.
When the FDD is complete and in substantial compliance with the Franchise Rule it will be assigned an Issuance Date. Upon issuance, the franchisor may begin to offer and sale franchises in states that do not impose additional regulations on the offer or sell of franchises. (See the PDF below).
The Federal rules govern disclosure requirements in all states. Individual states regulate the offer or sale of a franchised business to varying degrees. State requirements are in addition to the Federal requirements. A franchisor cannot offer or sale a franchise in a regulating state without first registering, filing, or qualifying for an exemption. (See the PDF below).
The offer or sale of all franchises are regulated to some degree in: California, Connecticut, Florida, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, Texas, Virginia, Utah, Washington and Wisconsin.
The offer or sale of franchises without a federally registered trademark are subject to regulation in the following additional states: Connecticut, Georgia, Louisiana, Maine, North Carolina and South Carolina.
You should speak to an attorney about registration requirements and the costs of submitting applications to registration/filing states as part of your franchise development process.
After the issuance of a valid Franchise Disclosure Document a Franchisor can begin to offer or sale franchises under that document in certain states; however, the Franchisor needs approval before offering under that document in regulating states. A franchisor cannot offer or sale a franchise in a registration or filing state until after the registration or filing is made effective in that state. The requirements for registration or filing vary by state. We recommend filing through the NASAA electronic filing depository whenever possible.
It Depends. Some approvals take weeks and others take months. Filing online through the NASAA electronic filing depository seems to expedite the process. You can't choose the state regulator, but we work diligently to ensure that our clients gain approval as fast as possible. This is vital for initial applications and for renewals.
We provide state-by-state approval tracking for all 50 states in a visually friendly and easy to understand manner for your business, franchise sellers, and brokers to utilize. Our system uses a simple green light / red light alert so that you know when you can and cannot offer a franchise in a particular state.
A Franchise Agreement cannot be be signed until the fifteenth (15th) day after the Franchise Disclosure Document (FDD) is disclosed to a prospect. You do not count the day that the disclosure document is disclosed (Example: Disclose January 1, wait 14 days, sign on January 16).
Certain states publish FDD's that are registered in their state. Try searching here:
We are Virginia franchise lawyers, but that does not mean we can only represent Virginia franchisors. Attorneys are permitted to work in their state while serving business interests across the country. In fact, it is likely impossible to locate an attorney for franchising that is licensed in every state you want to do business. An attorney licensed to practice law in any state can serve your franchise formation needs and file or register your FDD's in any state you wish to do business. We will be in Virginia when we conduct all legal work and will meet with you by phone or video conferencing. If litigation is involved, we are Virginia litigation attorneys and can work with local counsel in other states as needed. The key to finding a franchise attorney is ensuring they are well-versed in franchise law.