A franchisee enters a business relationship with a franchisor by buying the rights to sell the goods or services of a franchise. The franchisee also has the right to use the franchise’s intellectual property. The franchise should become a joint venture where both...
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Franchise Law
What are the elements of a franchise agreement?
A franchise agreement outlines the rights and obligations of the franchisor and franchisee to sell or use a company’s intellectual property and system of operations. Fundamentally, a franchise agreement describes how the franchisor and franchisee will work together....
When can you pursue another business with a similar name?
Dealing with copycats can be a major headache for any small business owner. Trademark registration protects your name from replication, but it does not prevent competitors from using a similar name. You may have a stronger case if the violation is obvious, but if not,...
Can you abandon a franchise agreement?
Franchisees and franchisors both sign contracts that outline the expectations both parties have regarding the partnership. However, things may not always go according to plan. If an insufficient number of customers are coming through the door, the franchisee may start...
Proving you are not misusing a franchisor’s intellectual property
A franchise dispute can quickly explode into a serious confrontation when the franchisor accuses you, as the franchisee, of misusing their intellectual property. Defending yourself against such a claim is crucial in maintaining your reputation and ensuring that you...
How does the proposal to ban noncompetes affect franchising?
Earlier this year, the Federal Trade Commission (FTC) proposed a rule to ban noncompetes in employment agreements, which includes franchise contracts. This is due to the increasing concern that employers unreasonably use this clause to limit employees from expanding...
What is cannibalization and what can I do about it?
You may notice a dip in your sales when another franchisee opens a store near your business. Because of your proximity, some of your sales naturally go to the other franchisee. This phenomenon is a typical case of cannibalization between two franchises. You may feel...
What you need to know before franchising
We see a franchise as a business opportunity, but it also can become a liability if not executed properly. Before any franchisee would like to enter into a commercial agreement with a franchisor, they must be aware of the basics of franchising. The Federal Trade...
3 critical areas of a franchise disclosure document
As a potential franchisee, you cannot afford just to trust the franchisor to have written a contract that will work for you. You need to review it thoroughly before signing to cement your agreement. Known as the franchise disclosure document, it outlines your future...
The pros and cons of franchise ownership
You possess an entrepreneurial mindset and have been thinking about owning a franchise. In the U.S. alone, there are approximately 674,000 franchise owners, and you wish to become part of this statistic. Owning a franchise is a popular way to make money, but it does...
