Category Archives: What’s a franchise?

Testing a New Franchise Concept

One of the toughest challenges an aspiring franchisor may face is selling its first franchise.  Who would take the risk of buying a franchise from a franchise company that has no franchisees? For a few successful business owners, the idea of franchising may come from one or more customers who love the business concept and initiate the idea of buying a franchise even before the owner has taken the first step to prepare a franchise offering.  But this rarely happens. Here’s another suggestion:  If the aspiring franchisor has a successful business unit (a store or a restaurant, for example) that …

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Correcting an Accidental Franchisor Violation

What’s a franchise?  Franchise registration and disclosure laws define a “franchise” more broadly than people generally realize.  A company may be franchising without knowing it.  The “license” agreement may have been drafted, for example, by an attorney who has limited knowledge about franchise law.  Hence the popular topic (at least among franchise lawyers) of the “inadvertent” or “accidental” franchisor. A business owner who has run a successful “test” of licensing its business may decide that the next step is to set up a franchise system, not realizing that the test was already a franchise sold in violation of one or …

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Franchise Law Change in New York

My optimistic world view got the best of me at the start of the 2014 legislative season in New York State.  I thought that 2014 might be the year when New York State changes its franchise law.  The changes that the New York State Bar Association (NYSBA) first recommended in January 2010 did become an Assembly bill at the end of the 2014 legislative session.  But no Senator wrote a companion bill in the 2014 legislative session.  And no bill came to a vote either in the Assembly or the Senate. The New York Franchise Act (NYFA) was already out of step with …

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