When you franchise a restaurant, fitness facility, retail store, or any other chain establishment, you are subject to a set of laws regarding the operations of that business. Franchise laws govern the sales, trademarks, registrations, grounds for termination, payments, and other common legal issues that may arise in a franchise situation, and are regulated by both state-level agencies and the U.S. Federal Trade Commission.
What’s Considered a Franchise
A business is considered a franchise when the business owner is permitted to use another company’s trademarks, logos, and name, and when the franchising company keeps some control over the business’ day to day operations. Many companies that franchise to individual owners, for instance, retain the right to approve of the business location, dictate how a business looks, and have control over basic operations, including sales techniques, opening hours, promotions, and training.
Rights and Responsibilities of Franchisor and Franchisee
Once a company and business owner enter into a franchising contract, both parties have responsibilities to the other. Typically, a franchisee is expected to pay the franchising company a specific amount of money within a certain period of time after the initial opening. This may include fees for the franchise, expenses for training, and any royalties owed for sales. The franchisee must also use the franchising company’s name, trademark, and other intellectual properties in the agreed upon way, and in no way that might harm the franchising company’s reputation.
On the other side of the rights and responsibilities involved in a franchise contract are those things the franchisor owes to the franchisee. These include full disclosure of all aspects of running a company branch, including expenses the owner can expect to incur for equipment, products, and promotions, the grounds on which a franchise may be terminated or not be renewed, and the required notice period before a franchise is terminated. Franchisors are also expected to treat all franchisees equally.
Seattle Franchise Law Attorney
When a known company and an entrepreneur go into business, both parties have a lot to lose. Franchise laws are designed to protect the interests of both parties involved. When you have a dispute regarding a franchise agreement, or believe the other party has broken the contract , you need an attorney with experience in the complicated area of franchise law. Howard R. Morrill has an extensive background of representing clients dealing with franchise disputes in Seattle and surrounding areas.