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FDD Basics: Understanding Item 1

Franchisors are generally required to provide prospective franchisees with a franchise disclosure document (FDD) before a franchise agreement is signed or any consideration is paid for the franchise. The FDD includes information about the franchisor, the franchise...

Why You Need a Franchise Attorney with Commercial Leasing Experience

Location can play a major role in a franchisee’s success. Most franchisors require their brick-and-mortar franchisees to find the site for the franchise business. However, most franchisors also require that the franchisee obtain the franchisor’s consent to the lease...

How the Sausage is Made: Confidential Information and Your Franchise

News about classified documents have dominated headlines this year. It reminds me of a key provision in a franchise agreement, specifically pertaining to confidential information. Franchisees should not reveal their franchisors’ private information. As direct as that...

Legal Traffic Holds Up Minimum Wage Boost For NY Delivery Workers

In a recent Insights installment, we discussed the new minimum wage rates for certain delivery workers in New York. Unsurprisingly, related legal developments and delays have arisen.  Today we will provide an update on the status of the new law and its impact on...

Mid-Year Franchise Developments

We like to close each quarter with news or legal updates impacting franchising on state, federal or industry-wide levels. Critical developments continue to occur, including one that recently took place. Let’s discuss how select updates might affect your franchise. New...

Contacting Current and Former Franchisees

Julie Lusthaus recently had an article published in Practical Guidance about the franchise disclosure document receipt. One of the benefits to buying a franchise is that there are other franchisees in the system, as well as other franchisees who have recently left the...

The Franchise Disclosure Document Receipt

Julie Lusthaus recently had an article published in Practical Guidance about the franchise disclosure document receipt. The Federal Trade Commission (FTC) Franchise Rule ("FTC Rule") and state franchise sales laws require franchisors to provide prospective franchisees...

Franchise Rules and Business Opportunity Rules: ‘Do Not Break’

In a recent Insights installment, we addressed business opportunity laws against the backdrop of franchise sales and relationship rules. Lusthaus Law’s readers and clients asked to know more about the Federal Trade Commission’s (FTC) Business Opportunity Rule and how...

Understanding Franchise Sales Laws and Franchise Relationship Laws

The goal of many franchisors is to expand their brand beyond their local jurisdiction and perhaps even nationwide. This broader presence can lead to mainstream recognition and the chance for lucrative business opportunities. But selling franchises that will be...

FTC Updates and Impact on NY Franchising

The Federal Trade Commission (FTC) has been focusing recently on the relationship between franchisors and franchisees. This has created a unique opportunity for franchise stakeholders to use their voices to influence policy. In addition to seeking comments about the...

Why Franchisors Need To Register With New York State

A local seafood franchisor found himself in hot water for failing to take some basic steps in filing with New York State. As recently discussed it was revealed earlier this year that BK Lobster, a Brooklyn-founded seafood restaurant, sold multiple franchises in New...

Franchising Developments: Q1 2023

NY Franchising Developments: Q1 2023 New York City franchises and laws are in the news and in courts. Additionally, NY franchisors and franchisees have the chance in the next month-plus to provide input to the Federal Trade Commission (FTC) on improving franchise...

Women Franchise Leaders On The Rise

Women may have more reasons to celebrate their achievements in franchising beyond March and Women’s History Month. Business and trade publications have indicated that 2023 is an ideal time for women to enter and excel in the field of franchising. Guidant Financial...

Expansion Options for Multi-Unit Operators in 2023

Growth comes in many forms. Whether you are a franchisor who wants to broaden your presence in a particular market, or a franchisee who is ready to develop more than one location, multi-unit expansion might be the best way to accomplish your goals. Let’s look beyond...

More Reasons to Update Your Franchise Agreement in 2023

Societal and consumer needs regularly change, and franchise lawyers should update their franchise agreement to reflect major developments and innovations. Franchisors and franchisees must continually adapt to new technologies, online behaviors and service and delivery...

February 2023, Julie Lusthaus Participating In Strafford Webinar

This CLE webinar on February 7th will provide guidance to business counsel on how to negotiate and draft franchise agreements and ancillary documents. The discussion will include key issues for counsel to consider when advising clients concerning key provisions in the...

New Tech Could Serve Up Change For Franchises

The traditional experience of restaurant dining has shifted in recent years, due to the emergence of third-party delivery and app-based ordering, which was crucial during the ongoing pandemic. But franchise dining was already trending in this direction prior to 2020...

Update Your FDD in 2023

Top FDD Renewal Questions Answered Franchisors are required to update their Franchise Disclosure Documents (FDD) annually as a matter of law as well as when there is a material change to the information contained in the FDD. Franchisors can also choose to update their...

The New Trademark Law Impacting Franchising

The United States Patent and Trademark Offices (USPTO) defines a trademark as “any word, phrase, symbol, design, or a combination of these things that identifies your goods or services.”  The use of a trademark is critical for franchises as well as nearly any...

Renewal: It’s the Most Wonderful Time of the Year to Review

The holiday season is often considered a time to celebrate and enjoy good company. It is also an ideal time to review your franchise agreement to determine whether your agreement will expire in the coming year. Many franchise agreements contain terms of five or 10...

Franchise News For Fall 2022

Developments are arising with regard to franchising in New York. Some of the franchise news stems from the North American Securities Administrators Association (NASAA), which as you will see below is an organization deeply embedded in the franchising process, and...

How Franchises Can Attract and Retain Talent

Business owners, franchisors, and franchisees are operating amid a labor market unlike any other in recent history.  Prior to 2020, technology and digital capabilities were already enabling (and challenging) employees to think about work differently. Then, the...

Who Sets Franchisees’ Prices? 

Despite its resilience, the franchise industry is still susceptible to inflation. With increased spending on goods and labor, some franchises are subtly boosting their prices and passing costs on to customers.  This is common for restaurant franchises. It was...

Dispelling Four Myths For Franchisees

There are many misconceptions about franchising that franchisees and business owners should know. These franchise myths often emerge from people who might be misinformed and websites that might be biased. Where your business is concerned, never let anyone give you...

State and Federal Resources for NY Franchisors and Franchisees

Spoiler alert for any franchising stakeholder: Lawyers do not have all the answers. At least not all of the time.  Whether you are an experienced operator, a new franchisor or franchisee, or an entrepreneur entering this exciting industry, you can look beyond...

Co-Branding Basics and Benefits

Have you ever passed or visited a restaurant or drive-thru that features two very recognizable, but entirely different brands? It could be a combination of Mexican food and pizza, or hot dogs and ice cream.  The merging of two franchises and their products under...

How Will The NYC Transparency Law Affect Franchisees?

When laws are passed that impact business operations, it is often up to the franchisee – who is considered an independent business owner – to stay on top of those new rules to avoid penalties, fines or litigation.  A new law regarding pay transparency in New York...

What Franchisors Must Know About New York Franchise Law

Establishing and selling franchises is complicated because both federal and state laws apply. Federal law establishes minimum disclosure standards for franchisors, but states may have additional registration and filing requirements which can vary significantly from...

Qualities of a Top Franchise Lawyer

Anyone considering buying their first – or next – franchise business will inevitably receive a franchise disclosure document (FDD) from the franchisor. The next step is to meet with a franchise lawyer to review the FDD, the franchise agreement, and other critical...

Four Franchise Renewal Tips

Franchisees have lots on their minds. Just maintaining a reliable staff and generating a profit is enough to keep an operator occupied. Understandably, most franchisees do not have the renewal process on their radar over the course of a standard agreement.  But...

FDD Item 20: Strategizing Your Questions

We have established the importance of the Franchise Disclosure Document (FDD), which franchisors share with prospective franchisees early in the due diligence process. There are 23 items in the FDD that contain information about the franchisor, the franchise system,...

How Long Do Franchise Agreements Last?

All franchise agreements have different terms. What works well in one system may not be appropriate in another. The term and renewal provisions of the franchise agreement set forth the length of the relationship. There are advantages and drawbacks to an agreement of...

Five Franchising Industry Trends You Should Know Now

Franchising is always evolving. New trends are emerging in the way products and services are offered and what drives growth beyond sales and behind the scenes.  Below are five franchising industry trends franchisors and franchisees should be aware of as they look...

The Laws And Regulations That Protect Franchisees

There are franchise laws and regulations that protect franchisees from being defrauded and unfairly losing their investment. Today we will provide brief overviews of the FTC Franchise Rule, State Disclosure Laws and State Relationship Laws. By understanding how these...

Initial Franchise Fee vs Royalty Fee: What’s The Difference?

Two of the most common costs associated with franchising are initial franchise fees and royalty fees. Franchisees – especially those new to franchising – need to understand the differences between the two and why they are so critical to the launch of a location. ...

How Franchise Consultants Can Aid Franchisees

Franchise consultants provide useful services for franchisors and franchisees. Sometimes referred to as “franchise brokers,” they have insight that can ultimately help both parties and expand the presence of the brand.  For a prospective franchisee seeking to...

What Does It Take To Be A Franchisor?

Two important questions to consider when deciding whether to take the leap into franchising your business: 1. Should you franchise your business? 2. Are you ready to franchise your business? You have a great business. Things are running smoothly, and you are making...

What Is The Effect Of Signing The FDD Receipt

One of the first steps involved in buying or selling a franchise is the sharing of the Franchise Disclosure Document (FDD). Under federal and state law, the franchisor must give the FDD to a prospective franchisee. The FDD is intended to help ensure that franchisees...