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The franchise agreement is the basic document which signifies the creation of a new franchise, includes certain required disclosures, outlines specifics about a given franchise, and provides other necessary information. At the Trembly Law Firm, we can help you develop, review and execute a franchise agreement which will satisfy your needs and ensure a smooth transaction.
Franchise Agreements in The State of Florida
A franchise agreement is a contract between the franchisor and the franchisee. The franchisor is the holder of the established business, and the franchisee is the party seeking to replicate that business. Importantly, franchise agreements are state-level instruments, which means that they are enforced and dealt with in whichever state they may be executed. This means that it is imperative to obtain counsel who is fluent with franchise law in the State of Florida.
The franchise agreement includes the essential terms of a given franchise. This means that the agreement contains information about the parties involved (franchisor and franchisee), disclosures, recitals, obligations, rights, payments, governing law, definitions, amendments, arbitration, and more.
Before a franchise agreement can be signed, the parties must adhere to certain rules. The first rule is the Franchise Rule. This rule imposes certain information disclosure requirements which must be satisfied prior to signing. The specifics of these information disclosures are regulated by the Federal Trade Commission (FTC). The franchisee must be provided with a Franchise Disclosure Document (FDD), which adheres to federal standards, at least fourteen days prior to signing the agreement.
After the agreement has been signed, there is a ten day waiting period before the agreement officially becomes a matter of state-level jurisdiction. Once state-level jurisdiction applies, the State of Florida is then tasked with enforcing the agreement.
Basic Content of Franchise Agreements
Although the specific content of any given franchise agreement will vary, a number of items are common to virtually all agreements. The following is a list of some, but not all, of the most common items:
- Franchise Disclosure Document (FDD)
- Parties of the agreement
- State required disclosures
- Ownership details
- Objectives of parties
- Details regarding license issues
- Details regarding franchisee payments
- Details regarding franchisee services
- Details regarding territory, start date, trade name, transfer issues, and so forth
- Details regarding franchisee obligations
- Governing law
- Arbitration agreements
- Liability issues
A given agreement may contain many additional items. Because of the volume and nature of its content, a franchise agreement may be quite complex. For this reason, it is essential that you obtain adequate counsel. A qualified franchise law attorney can assist as you prepare for and execute your franchise agreement.
Contact a South Florida Business Law Firm
The Trembly Law Firm can provide stellar guidance as you attempt to navigate franchise agreements and other aspects of franchise law. As mentioned, this area can become very complicated very quickly. The last thing you want is to be overwhelmed with unfamiliar terminology and unknown concepts while you attempt to develop a contract. Our team has a history of creating value by helping clients understand the nuances of franchise agreements and execute good contracts. Give us a call today to learn more.
Si usted habla español y está interesado en franquiciar un negocio existente, o iniciar un negocio en Estados Unidos, ingrese aquí para comunicarse con nosotros: https://tremblylaw.com/franchiseespanol/
Frequently Asked Questions
South Florida Business Attorney Brett Trembly addresses commonly asked business law questions in his Video of the Month series. If you have any questions for us, or if you need immediate legal assistance, please contact us today.
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