Practice Areas

Franchising

Franchises: For some it has always been a dream to open up their very own franchise such as Burger King, McDonald’s, KFC, or Papa John’s. The opening of a franchise can be an intense process, yet lead to impressive gains if done correctly. Allow Gilbert & Caddy to prepare your franchise and disclosure agreements, advertising agreements, computer contracts, license agreements, lease agreements, and any other legal or negotiating tasks to get you your franchise.

In some instances you will be able to select a location for your new franchise, Gilbert & Caddy’s team of real estate professionals can help you with your site selection, from negotiating the lease or purchase to closing on your selected property.

Franchise Disclosure Documents: Franchising arrangements between Franchisor and Franchisee are regulated by the Federal Trade Commission (FTC) which requires you to prepare a Franchise Disclosure Document (FDD) prior to signing any Franchise Agreement. The FTC mandates that in order for a Franchisor to properly obtain a Franchise that the FDD must comply with particular filing deadlines and obtain particular information in order for a Franchise to be initiated.

The FDD must provide: The Franchisor and any predecessors, litigation history, bankruptcy, listing of the initial franchise fee and other initial payments, other fees and expenses, statement of franchisee’s initial investment, obligations of Franchisee to purchase or lease from designated sources, obligations of Franchisee to purchase or lease in accordance with specifications or from authorized suppliers, financing arrangements, obligations of the Franchisor (other supervision, assistance of services), exclusive/designated area of territory, trademarks, service marks, trade names, logotypes and commercial symbols, patents and copyrights, Obligations of the Franchisee to Participate in the Actual Operation of the Franchise Business, Restrictions on Goods and Services Offered by Franchisee, Renewal, Termination, Repurchase, Modification and Assignment of the Franchise Agreement and Related Information, Arrangements with Public Figures, Actual, Average, Projected or Forecasted Franchise Sales, Profits or Earnings, Information Regarding Franchises of the Franchisor, Financial Statements, Contracts, and Acknowledgment of Receipt by Respective Franchisee.

As you can see just the initial processing for the FDD is an exhausting task. Gilbert & Caddy, PA will assist you in preparing not only you FDD, but working with you in finalizing the procedure in obtaining your Franchise or enforcing your Franchise arrangements.

Franchise Agreements: The second stage, but perhaps the most important step in creating a Franchise is the Franchise Agreement. This document is the legally binding contract between the Franchisor and Franchisee and provides in detail the relationship between both parties and certain guidelines and procedures that may or must be required to be performed.

Some Franchisees provide for non-negotiable agreements, do not be bullied or pushed around by the Franchisees if you have questions, concerns, or points of clarification you deserve an answer or modification to the Agreement. Gilbert & Caddy has the experience to preserve your legal rights and limit your liability in the Franchise Agreement. Franchise Agreements are structured to favor the Franchisee and are rampant with “dos” and “don’t’s” which you will have to comply with or you may find yourself in serious legal and financial trouble.

Although, your Agreement may not appear to be weighed against you, Franchisees are well aware of the common problems that affect them detrimentally when it comes to its business relationship with you as a Franchisor. Our firm is well-versed with Franchising and is able to see where the potential pit falls may be for you and what your actual liability and benefits may be. If you want to succeed in your Franchise, you may be required to comply with certain profit productions, obtain certain licensures, do specific training, not be allowed to sell your business, repair, maintenance, and upkeep requirements.

In the end, you need to insure that not only the Franchisee is protected, but you the Franchisor is protected. Gilbert & Caddy will explain and walk you through among many other things: reviewing and understanding the operations manual; reviewing and understand the training manuals; contractual explanation and review; explaining what exactly your business relationship is; proprietor remarks (ie. Use of franchise name, types of training and advising); advertising costs and approval; repair, maintenance, and upkeep; reviewing assigned territory; franchise fees; royalties; operating protocol; franchise duration and term length; resale rights; and dispute resolution (ie. Mediation, Arbitration, Court).