Franchise Law

A franchise offers a recognized brand and an established system, but the franchise agreement gives the franchisor broad control over how the business runs and how it ends.

Before signing, a franchisee should understand the fees, territory, renewal and termination terms, personal guaranty and post-term non-compete. We help first-time and multi-unit franchisees understand those terms and negotiate where the franchisor allows it.

Attorneys

What We Handle

FDD and Franchise Agreement Review

A clear explanation of the fees, territory, obligations, renewal and termination terms before you commit.

Negotiation

Changes to the franchise agreement where the franchisor is willing, such as territory, deadlines or the personal guaranty.

Entity Formation

Forming the company that will sign the franchise agreement and own the business.

Franchise Financing

Review of loan documents, including SBA loans, and the franchisor's requirements for financing.

Buying or Selling a Franchise

Purchases and sales of franchised locations, including the franchisor's transfer approval and fees.

Franchises We Work With

How Franchising Works

A franchisor licenses its brand and operating system to a franchisee, who owns and runs the location. The franchisor grows without opening every location itself, and earns initial fees and ongoing royalties. The franchisee gets a recognized brand, training and support in exchange for following the system and paying those fees.

Our articles on the FDD and franchise agreement and buying a franchised business go into more detail.

Frequently Asked Questions

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What is a Franchise Disclosure Document?

The FDD is the disclosure document franchisors must give prospective franchisees under the FTC Franchise Rule. It covers the franchisor's background, litigation history, fees, estimated initial investment, territory, renewal and termination terms, and financial statements. It must be provided a set number of days before you sign or pay anything.

Can a franchise agreement be negotiated?

Sometimes. Franchisors often say their agreements are not negotiable, especially established brands. Even so, many will consider changes on points such as territory, development schedules, opening deadlines or the personal guaranty, particularly for experienced or multi-unit operators.

Does Texas require franchise registration?

Texas does not have a franchise registration law like those in states such as California and New York. Franchisors selling in Texas may need to file a one-time exemption notice under the Texas Business Opportunity Act, and the federal disclosure rules still apply.

What should I look for when buying an existing franchise location?

Along with normal acquisition diligence, review the remaining term of the franchise agreement, the franchisor's transfer requirements and fees, any required remodel and whether you must sign the franchisor's current form of agreement. Our buying a business page covers the rest of the process.