All Insights

What Happens to the Lease When a Franchise Terminates?

Leasing property for a franchise involves two different agreements – the franchise agreement and the commercial lease. The franchise agreement sets forth the franchisor’s rights and requirements with respect to leases signed by the franchisee. The lease terms must...

Top Three Issues in Negotiating Area Development Agreements

Some franchisees want to develop several franchises in a region as a way to increase revenue and profits quickly. Having multiple local businesses can reduce costs, improve efficiency, and provide some temporary protection from competition. Selling multiple franchises...

Are Virtual Discovery Days for Franchises the Future?

Discovery Days for franchises were developed as an opportunity for both franchisors and potential franchisees to get to know each other and decide whether they are a good match. Traditionally, they have involved in-person meetings conducted at the franchisor’s...

Should You Consider a Ghost Kitchen for Your Restaurant?

Ghost kitchens are getting more attention by restaurant owners thanks to COVID. The concept predates the pandemic, but with restaurants struggling to survive, the potential for lower costs and more revenue is particularly attractive. Ghost kitchens are off-site...

Negotiating Master Franchise Agreements

Every sale of a franchise requires a franchise agreement whether it's a single-unit franchise agreement or a multi unit franchise agreement which sets forth the terms that will govern the relationship between the franchisor and franchisee. In the context of a master...

June 2020, Julie Lusthaus featured on The Boston Podcast

On June 22, 2020, Julie Lusthaus was featured on The Boston Podcast. In the episode, titled Getting Back to Business? Julie Lusthaus and insurance professional Mike Laorenza talk about the future of business, sports and much more. Click the link below to listen....

Is This the Time to Franchise Your Tutoring Business?

Tutoring is a booming business. In the U.S., it is reportedly a $4.9 billion industry. It is considered to be relatively recession-resistant in that parents are reluctant to cut education services to help their children. While in-person tutoring is likely to continue...

Is a Master Franchise Model Right for You?

As discussed in a previous post, there are several types of franchise models including Single Unit, Multi-Unit Development (or Area Development), Conversion, and Master Franchise. Each has its advantages and disadvantages based on the franchisor’s expansion goals...

COVID-19 Results In States Extending Franchise Filings

As the coronavirus spreads across the U.S., the federal and many state governments are providing relief to businesses by extending the deadlines on various filings. Among the areas receiving attention are state registration and filing deadlines for franchisors....

Businesses Face New ADA Claims Over Gift Cards

A new wave of litigation under the Americans with Disabilities Act (ADA) is hitting business owners. For the last few years, businesses have faced lawsuits regarding the accessibility of their website to the visually impaired. Now, gift cards are have become a target...

Should You Franchise Your Commercial Cleaning Business?

Commercial cleaning businesses are experiencing solid growth thanks to increases in construction and real estate investments. According to Allied Market Research, the commercial cleaning services market size is expected to grow at 5.8% globally by 2022. The commercial...

How Does the Revised Joint Employer Rule Affect Franchisors?

A revised rule addressing joint employer status under the Fair Labor Standards Act (FLSA) announced January 12, 2020 may offer some relief to franchisors. Under the FLSA, employers must comply with federal minimum wage and overtime laws. An employer is defined as “any...

Should You Franchise Your Restaurant?

Some of the best-known franchises are restaurants. McDonald’s, Subway, Domino’s, Wendy’s, Buffalo Wild Wings, and others have thousands of locations. If you have a popular restaurant, you may be thinking of expanding to multiple locations. While you can choose to take...

What Ongoing Legal Compliance is Necessary for Your Franchise?

Your franchise has launched, and you are actively marketing and selling to franchisees in compliance with all applicable laws. There is no more need for legal advice or so you think. However, under federal and state franchise laws, there are ongoing registration and...

Franchising Your Gym or Fitness Center

As we start the new year, many people are thinking about getting fit as their resolution for 2020. The health and fitness industry in the U.S. generates more than $30 billion in revenue and is growing every year. A big part of that revenue is driven by franchises....

What Should Be Included in the Franchise Operations Manual?

Item 11 of the Franchise Disclosure Document is where franchisors are required to outline their obligations to help support franchisees before and after operations begin. Part of this assistance involves loaning the franchisee a copy of the franchisor’s operations...

How Do you Determine the Initial Investment for Item 7

Item 7 of the Franchise Disclosure Document (FDD) requires franchisors to set out in a prescribed tabular format a franchisee’s estimated initial investment – i.e., all the expenses required by the franchise agreement and all other costs necessary for a franchisee to...

What Franchise Model Should You Use?

There are 4 main types of franchise models for business format franchising: Single Unit, Multi-Unit Development, Conversion, and Master Franchise. We discuss the benefits of each for a prospective franchisor.

What Business Terms Will You Offer Franchisees?

The Franchise Disclosure Document (FDD) provides a significant amount of information about the franchisor and franchise system as noted previously. Among the most important items in the FDD are the business terms between the franchisor and franchisee. These are...

How Do You Start the Franchising Process?

Once you have decided to expand your business through franchising, one of the next steps is to create the Franchise Disclosure Document (FDD). The FDD contains information about the franchisor and the franchise system. The Federal Trade Commission and state regulators...

Are You Ready to Be a Franchisor?

Once you have decided that you have a “franchise-able” concept, next you must determine whether franchising is the right step for you. Becoming a franchisor requires a substantial investment of time and money, but the rewards can be well worth it. Before you move...

Should You Franchise Your Business?

You have a successful business and are wondering if franchising makes sense. While there are many well-known and profitable companies, few become franchises. For every McDonald’s, Hertz, Choice Hotel, there are probably millions of businesses that could not and should...

What Does It Cost to Open a Franchise?

Opening a franchise may seem less risky than starting another type of business, but like all new businesses, it can require a significant upfront investment. Running out of money is a big reason why businesses fail. If you are thinking about buying a franchise, you...

Should You Consider a Marijuana Franchise?

Over the last few years, public opinion has been moving toward legalizing at least some use of marijuana. Currently, thirty-three states and the District of Columbia have passed laws decriminalizing marijuana in specific instances. Most of these states allow medical...

What You Need to Know About Franchise Fees and Payments

Before you buy a franchise, it is important to understand what costs will be associated with starting and maintaining the franchise. The franchise disclosure document (FDD) contains information about what fees you must pay to the franchisor and other third-parties....

Restaurants Face New Bans on Plastic Utensils, Straws and Styrofoam

Over the last 2 years, a growing list of U.S. cities have worked to pass laws to ban the use of plastic utensils, straws, and Styrofoam containers. On May 1st, Maine became the first state to ban single-use food and drink containers made of polystyrene foam (aka...

Can Franchisees Terminate a Franchise Agreement?

Franchisees often do not pay much attention to termination clauses in their franchise agreements. A franchisee is often excited to buy the franchise and imagines that all will go well, so there will not be a need to consider terminating the agreement. The more likely...

Celebrating your fiscal year-end? Remember to update your FDD!

Updating FDDs everywhere You just celebrated the end of 2018. Did you close your franchise system’s fiscal year the same day? December 31, 2018, is a typical fiscal year-end date for most companies – franchises included. But whatever day your business year ends, a...

Are you ready to renew your franchise agreement?

Time flies. Wasn’t it only yesterday that you signed your original franchise agreement? But now it’s five, 10, 15, or 20 years later and it is time to renew…or not. Most franchise agreements include a renewal option, but unless you meet certain conditions, that...