News & Analysis as of

Franchise Disclosure Document

Does Arbitration Make Sense For Franchisors? A Litigator’s Perspective

by Mulcahy LLP on

Let’s face it; arbitration is not always the quicker, cheaper forum for parties to resolve their differences. Although arbitration does have the potential to be more economical and efficient than court, in practice, these...more

Before Franchising Your Business, First Consider These Factors

by Lewitt Hackman on

Franchising is so much more than casual burger chains with drive through windows and dollar menus. It’s an industry that incorporates a wealth of blue and white collar services; distributes both high- and low-end products...more

When are Parent Company Financial Disclosures Required?

by LeClairRyan on

A franchisor selling franchises in the U.S. must disclose its audited financial statements in Item 21 of the franchise disclosure document (FDD). Sometimes, parent company financials are used instead of the franchisor’s...more

A "reasonable basis" for FPRs: what to expect this renewal season from state franchise examiners in light of the proposed NASAA...

by DLA Piper on

Last fall, the North American Securities Administrators Association Inc. (NASAA) issued a notice of request seeking public comment on an updated proposed financial performance representations (or FPR) Commentary. The Federal...more

FRANCHISEE 101: Technical Disclosure Violations

by Lewitt Hackman on

The consequences to an unwitting franchisor can be severe when it fails to provide disclosure documents required by franchise law. Most franchise laws provide for rescission of the franchise agreement, allowing the franchisee...more

Testing a New Franchise Concept

by LeClairRyan on

One of the toughest challenges an aspiring franchisor may face is selling its first franchise. Who would take the risk of buying a franchise from a franchise company that has no franchisees?...more

Franchise and Distribution News - March 2017

by Dickinson Wright on

Is your dispute, subject to arbitration under your Franchise Agreement, going to be litigated in court? As we all know, using arbitration clauses in commercial agreements is pretty commonplace—particularly in the...more

Getting to know British Columbia’s new franchise legislation

by DLA Piper on

After years in development, the British Columbia Franchises Act and its regulations came into force on February 1, 2017. British Columbia is now one of six Canadian provinces to enact franchise legislation, following...more

Regulation A+: A Capital-Rising Method that is Ready for Franchising

by Baker Donelson on

In a prior article published in Franchising Today, we addressed the intersection of franchises and crowdfunding, a method of business financing which was made legal through rulemaking on the part of the Securities and...more

SBA's New Rule Offers Some Welcome Changes for the Franchise Community

The Small Business Administration (SBA) has been a key player in franchise development, providing loan guarantees for franchisee start-ups. As a condition for providing these guarantees, the SBA historically required a...more

Correcting an Accidental Franchisor Violation

by LeClairRyan on

What’s a franchise? Franchise registration and disclosure laws define a “franchise” more broadly than people generally realize. A company may be franchising without knowing it. The “license” agreement may have been...more

Franchise Opportunities: One Size Does Not Fit All

by Poyner Spruill LLP on

Purchasing a franchise opportunity has become a popular means of pursuing a new business venture. The idea of joining an established group and utilizing a recognized brand can offer an added level of comfort when going into...more

FRANCHISEE 101: How Far Do Earnings Projections Go?

by Lewitt Hackman on

A franchisor is allowed to make "financial performance representations" in its disclosure documents. These figures may project how much money a franchisee is likely to make and can play a critical part in the franchisor's...more

Suspending Franchise Sales

by LeClairRyan on

In several states that require franchise registration, it is a good idea to suspend franchise sales while an amendment or renewal application is pending with the state.  Franchisors commonly suspend franchise sales pending...more

FRANCHISOR 101: Outdated FDDs and Unregistered Franchises

by Lewitt Hackman on

The California Department of Business Oversight ("DBO") recently issued three Orders against franchisors for violating California's franchise laws....more

Electronic and Courier Delivery Coming to Ontario

by Dickinson Wright on

After long anticipation from the franchise industry, the government of Ontario has finally amended regulations under the Arthur Wishart Act (Franchise Disclosure), 2000 (“Act”) to expressly allow a franchisor to deliver its...more

Legislative Update: Electronic Disclosure to Prospective Franchisees Coming to Ontario July 1, 2016

Effective July 1, 2016, Ontario will permit disclosure documents required under the Arthur Wishart Act (Franchise Disclosure), 2000 (Act) to be delivered electronically to prospective franchisees. The Act provides that a...more

An Intellectual Property Primer for Franchisors

by LeClairRyan on

Intellectual property is a core asset of any franchisor. In fact, intellectual property is important to virtually all businesses. For some companies, it’s their most valuable asset. A basic knowledge of intellectual property...more

FRANCHISEE 101: Relying on Franchisor’s Profit Projections

by Lewitt Hackman on

Most experienced franchisors know better than to make claims about profits franchisees can expect when those claims do not match the information in the franchisor's Franchise Disclosure Document. However, if a franchisor or...more

What’s an FPR?

by LeClairRyan on

Every franchise buyer wants to know how much money he or she can make from the franchised business. Franchise sellers naturally want to answer that question in order to make the sale. But many say that they cannot give...more

[Webinar] Franchise Disclosure Compliance: The Nuts & Bolts - United States - January 19, 3:00pm EST

by Dickinson Wright on

Please join us for Franchise Disclosure Compliance: The Nuts & Bolts a webinar highlighting many of the “must do” or “must consider” matters for compliance with franchise disclosure legislation in U.S. ...more

[Webinar] Franchise Disclosure Compliance: The Nuts & Bolts - Canada - January 19, 1:00PM EST

by Dickinson Wright on

Please join us for Franchise Disclosure Compliance: The Nuts & Bolts a webinar highlighting many of the “must do” or “must consider” matters for compliance with franchise disclosure legislation in Canada. ...more

Franchise POST: The Reformation of Financial Performance Representations; Has the Time Arrived?

by Nexsen Pruet, PLLC on

Financial Performance Representations (“FPR’s), or earnings claims, have been an integral part of franchise sales process well before the Federal Trade Commission (“FTC”) began its supervision of the franchise model. The...more

FRANCHISOR 101: Catch-all Disclaimers No Substitute for Untrained Salespeople

by Lewitt Hackman on

How strong are "non-reliance disclaimers" or "integration" or "merger" provisions in franchise agreements at protecting a franchisor when it really matters? Only so much, a New York court recently decided....more

What’s an Exclusive Territory?

by LeClairRyan on

The extent of a franchisee’s territorial rights is the subject of Item 12 of the franchise disclosure document (FDD). One of the questions franchisors must address in Item 12 is whether the territory is exclusive....more

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