Franchising Your Business

If you decide to start franchising your business, an experienced franchise attorney at Denton Peterson can assist you through the process. Choosing the right structure for your proposed franchise and then preparing the proper Franchise Disclosure Document are some of the most important first steps for starting your franchise. There are strict rules regarding the Franchise Disclosure Document that you will need to be aware of. You cannot sell a franchise until the Franchise Disclosure Document is properly prepared for prospective franchisees.

During our initial meeting with franchisors, we ask our clients to fill out an extensive questionnaire and we have an in-depth discussion to understand your goals for franchising your business and how you want to structure your business. Our attorneys will help you understand the pros and cons of each franchise type, such as unit franchises, area representation franchises or other franchise models. We also discuss other important information regarding the franchise including franchise fees, royalty fees, advertising, term of the franchise relationship, franchise territory, trademarks, and financial disclosures.

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Once you have determined the right direction for your company, we work on drawing up the Franchise Disclosure Document to get your new business opportunity started on the right foot. The Franchise Disclosure Document or FDD is a lengthy document in which franchisor provides specific information about the offered franchise as required by federal law. The FDD and associated documents will ensure you are meeting your legal requirements, and it will give potential franchisees the information they need to make a decision about your company. The document also includes exhibits with sample franchise agreements, financial statements, and other information. Additionally, the FDD must also be updated to reflect any changes in the business. We help clients update their FDD as needed.

Franchise Registration

In addition to the federal franchise rules, some states impose additional requirements on franchisors including registration before franchisor can begin selling its franchise in that state. If you plan on selling franchises in any of these registration states, you will need to register your franchise in each of those states. The rules vary in each state, so it is important to understand each state’s requirements. We help clients file the registration application with the appropriate state agency to ensure that the paperwork meets all of the state requirements. Registrations must be renewed each year in the states in which you intend to continue to offer franchises for sale. It is important to talk to a franchise attorney about where you plan on selling your franchise in order to make sure your franchise is ready for sale in that state. The process varies between states and it can take from a couple of weeks to several months to register the franchise in some states. If you will sell your franchise in a registration state, you will want to make sure you have adequate time for the registration process before you plan on offering your franchise for sale.

We also keep track of the important deadlines and renewal requirements and let clients know when those are imminent. That way, our clients can meet these requirements while also focusing their energy and time on growing their business.