Franchising: An Updated Look at the Basics

Summary

In the United States, sales of franchises are regulated by the Federal Trade Commission (FTC) and various state statutes and regulations. This practice note will review what a franchise is, the importance of trademark registration for franchisors, and advise counsel on how to avoid a standard license agreement being construed as a franchise agreement. This practice note will also review the applicable state and federal laws and regulations governing the sale/post-sale of franchises and distributorships, as well as related laws covering issues such as termination, renewal, and assignment rights. Last, this practice note will review joint employment liability in the franchise context and discuss how franchisors can minimize their joint employment liability risks.