CHALLENGE
A quick-service restaurant had several successful restaurant locations throughout New York City. The brand specialized in offering healthy menu items prepared from locally-sourced ingredients. The owners wanted to expand the restaurant system throughout the U.S. and debated whether franchising would be the best way to accomplish the expansion.
SOLUTION
The owners retained Lusthaus Law PC to learn whether franchising made sense and what steps were necessary. After careful and thorough consideration, we helped the owners determine that their concept could be franchised. It was unique, it could be replicated by others, and the owners could teach their systems and procedures to franchisees who could then run their own businesses in a reasonable amount of time. The owners knew there was a market for their menu items and that if franchisees followed their system, their restaurants would be profitable.
RESULT
Our firm helped gather the necessary information and created the franchise disclosure document (FDD). Additionally, we filed the paperwork with the appropriate state regulators to ensure that the clients were legally permitted to sell franchises. We then provided compliance training and assisted with onboarding new franchisees so the clients would not run afoul of franchise sales laws resulting in significant liability. As franchisors are required to update their FDDs annually and whenever there is a material change to the disclosure, we provided ongoing advice and guidance on these requirements to ensure that the franchisor can continue legally selling franchises and expanding its brand.
