Franchise laws are composed of state and federal laws that regulate the registration, operation, and sale of franchises. Each state has its own set of laws that govern franchises, but the Federal Trade Commission (FTC) governs all franchises through the Federal Franchise Rule.
Some states, including Virginia, require franchisors to register their franchise before selling to prospective franchisees. Federal law also governs the relationships between franchisor and franchisee. Our attorneys at Walton & Adams, P.C. will assist you with navigating the complexities of franchise law, from registering your franchise to selling to prospective franchisees.
When an individual or group establishes a franchise, they must register a franchise disclosure document (FDD) with the FTC before proposing an offer to prospective franchisees. The FDD must be in compliance with the Federal Franchise Rule and any state franchise laws that a franchise location will operate in. The states that a franchisor intends to sell locations in must also approve of the document. Walton & Adams, P.C. will work closely with you to ensure that your FDD has been properly registered and is recognized by the FTC.
Selling to a Franchisee
Selling a franchise to a franchisee encapsulates a variety of complex procedures. Before the franchisor can make an offer to an intended franchisee, they must provide the franchisee with the registered FDD. The franchisee cannot sign agreements or submit funds for 14 days after receiving the franchise disclosure document. In order for the agreement to be validated, the state in which the location will operate must approve of the FDD. The franchisee must also be a legal resident of the state they intend to establish the location in. Additionally, the contractual relationship must be in compliance with state and federal franchise relationship laws, and franchisors must have protection against franchisees who breach the franchise agreement. Walton & Adams, P.C. can provide these protections and ensure that all regulations are precisely met.
Experienced Franchise Attorneys
Walton & Adams, P.C. provides indispensable legal assistance to individuals seeking to register a franchise, or those who intend to buy or sell a franchise location. Our attorneys have years of experience working with new and established franchisors to file and register their FDD, as well as offer and sell to prospective franchisees. We will ensure that your FDD is in compliance with state and federal laws, as well as assist with the entire process of franchise registration, disclosure, and sale.