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Franchising Your Central Florida Business: Legal and Regulatory Steps

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Central Florida is among the hottest places to own and operate a franchise business, either as the franchisor (the entrepreneur with the licensed business model) or as a franchisee (the party that owns and operates the company using the established business model). If you’re a business owner, you already know about many of the complicated steps to maintain and keep a business running strong. But even the most experienced business owners may be unfamiliar with the additional complexities associated with franchising. That’s why working with a legal partner like our law firm is important.

As your legal representatives, we will work with you today and in the future, acting similarly to in-house counsel. But until that time, it is good to familiarize yourself with some of the necessary legal and regulatory steps relevant to franchising in the state of Florida.

Is Franchising the Next Stage for You and Your Florida Business?

Franchising is a big step, one that demands a significant investment of time and money. And while you may be an experienced and successful business owner, being a successful franchisor is a whole new ballgame. Rather than selling the goods and services you’ve successfully sold, you are now selling franchises, including the associated brands, policies, guidelines, and methods. Your consumer will shift from the public to the franchisee. Are you ready?

What Are the Basic Steps to Starting a Franchise in Florida?

There are several state and federal laws you must comply with if you want to begin franchising.

The basic steps to franchising are as follows:

  • Speak with a lawyer to consider the full implications of starting a franchise.
  • Research franchise opportunities. Consider the fees in marketing, royalties, and certain industry-specific fees. But also consider the financing you will need and the potential yearly revenue you could take in.
  • Evaluate these opportunities vs. the costs of pursuing the opportunities.
  • Prepare for all the necessary legal steps.
  • Work with your lawyers to draft a detailed business plan.
  • Develop your franchise’s policies and methods.
  • Register your trademarks with the U.S. Patent and Trademark Office (USPTO).
  • File your Franchise Disclosure Document (FDD).
  • Establish your franchise as a legal entity.
  • Create a sales and marketing strategy.

What is the Federal Franchise Rule?

The Federal Franchise Rule governs all franchises across the country and is enforced by the Federal Trade Commission (FTC). Under the Federal Franchise Rule, the FDD is the most critical document, and the franchisor must present it to the franchisee before any deals are completed.

The FDD is incredibly important, but other documents are also required on a state level.

What State Requirements Must Your Franchise Meet?

Florida has supplemental franchise statutes relevant to how a franchisor registers their franchise business. There are also regulations in place that govern the duties and responsibilities between the franchisors and franchisees.

Most, but not all, of these guidelines fall under the Florida Franchise Act (FFA). You are highly encouraged to speak with experienced business law attorneys, such as our Daytona Beach-based legal team to learn more.

What is an FDD?

The franchise disclosure document (FDD) is lengthy, more the size of a large book than the usual business agreement, and in its pages are seemingly countless pieces of data related to the business, its revenue stream, and a listing of other current franchisees.

The general purpose of an FDD is to present the franchisee with a comprehensive accounting of the investment they’re about to make, allowing them to make the most informed decision possible before signing on the dotted line. And while the franchise may present an individual with the opportunity for success, there is no guarantee. Just the same, however, it is essential that the documentation of the franchise be legitimate or else risk the potential for litigation because of false claims.

What is Included in a Franchise Agreement?

When drafting the franchise agreement, the language must remain simple while the subject matter is all-encompassing. Cover everything. Leave nothing to ambiguity.

Your franchise contract agreement should cover all of the basics, such as:

  • The identification of who the franchisor is and who the franchisee is.
  • An established set of roles, duties, and responsibilities as a franchisor and franchisee.
  • The establishment of the geographical area for the new franchise business.
  • A definition of the region or size of the franchise’s area.
  • The contract renewal rights.
  • Termination clause.
  • A definition of the minimum performance requirements.
  • A page for definitions of terms included in the business contract.
  • Restrictive covenants like NDAs, non-compete clauses, and non-solicitation agreements are unnecessary but may be encouraged in some circumstances.

What Franchise Legal Services Does Our Law Firm Provide?

Our law firm offers many legal services to franchisors and franchisees that may help them through the challenging legal steps into the future.

Some of the services we can provide include the following:

  • Draft, review, and negotiate business agreements.
  • Draft and revise the FDD.
  • File your FDD and work with the state to ensure that registration goes as smoothly as possible.
  • Provide legal counsel to all prospective franchisees interested in conducting business with you.
  • Ensure all documents and other factors fully comply with state and federal laws.
  • And more.

Schedule Your In-Depth Case Evaluation with Our Experienced Business Law Attorneys Today

Franchising is a big step for any business owner. Some businesses are not well-suited to franchising, and that is okay. But if you wish to pursue this business avenue, we would like to be there by your side every step.

Many laws and regulations must be contended with to establish a legal franchise. Trust in our legal services to assist you through these challenges. Contact Lankford Law Firm to schedule your initial consultation today. 850-888-8992.

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