It can be easy to get lost reading and analyzing a franchise agreement and disclosure documents. It is a significant investment of time and money, and you want to make sure you can start your new business successfully.
One of the advantages of purchasing a franchise is being part of an established brand. Over the years, the franchisor has worked on having a consistent product/service with an enduring message. When you invest in a franchise, part of what you need for success is access to the overall branding of the product.
Look for terms on these subjects when you are signing a franchise agreement:
(1) Marketing Materials;
(2) Computer Systems;
(3) Trademarks;
(4) Patents;
(5) Copyrights; and,
(6) Other Proprietary Information.
Marketing materials
Part of starting a successful franchise is getting the word out that you are open for business. Often, franchisees will count on the franchisor to either provide signage and advertising, or to make it available for the franchisee to purchase.
When you are negotiating the terms of the agreement, look for provisions that describe the marketing that will be available to you and the additional cost, if any. Also, pay attention to the rules the franchise may have for usage of the franchisor’s marketing and branding materials and rules that may apply to creating new marketing materials.
What trademarked and patented materials should a franchise include?
Owning a franchise, in many cases, means working with products and/or services with patent, trade secret, trademark or other protections. Pay attention to the language in the agreement that explains acceptable uses and limitation for protected material.
Often, the franchisor grants a temporary license to use proprietary information. The franchisee will need permission to use relevant protected material to promote the business and the brand. The agreement, however, may provide a limitation on the conditions that apply to the franchisee’s use of and access to such materials.
Whether you are operating a franchise as a franchisee or offering franchises as a franchisor, you are likely to face a broad variety of legal and regulatory issues specific to franchises. With the backing of a strong entrepreneurial business sense, together with the expertise and skillsets drawn from several of our diverse practice areas, SederLaw attorneys fully understand the ins and outs of franchising and advise clients on Franchise Law matters in a wide array of situations.
Our Franchise Law attorneys are experienced in assisting both start-up and mature franchisors and franchisees with developing, licensing and protecting their various rights, franchises and distribution systems; and, in the case of franchisees, ensuring compliance with the complex myriad of rules and provisions that are often imposed upon their franchisee businesses by franchisors. As part of this practice, we counsel companies regarding the laws and regulations pertaining to both franchising and operating a franchise and assist them in creating and negotiating their contracts and agreements, franchise disclosure documents, intellectual property rights and other critical operational documents.
SederLaw’s Franchise Law attorneys are skilled at navigating the challenges that arise for both franchisors and franchisees in a variety of industries, including retailers; indoor game and amusement parks; restaurants (including both full and fast food service restaurants); insurance; healthcare and home health services; real estate; wine, beer and alcohol distribution and service; professional services companies; and automotive dealerships.
When disputes arise, attorneys in our Franchise Law group have the knowledge and experience to help guide our clients through every kind of legal proceeding. With our experience in mediation, arbitration, and litigation, we understand the risks inherent in the relationship and work with our clients so that they can focus on franchise brand and system growth. Our lawyers keep informed and abreast of new laws and court decisions that can impact the outcome of a dispute, and we use our experience and knowledge to help our clients make decisions that account for the variety of challenges that a franchise client will face.
Contact:
Partner, James Vevone
SederLaw
339 Main Street, Suite 300
Burnside Building
Worcester, MA 01608
jvevone@sederlaw.com
508-757-7721Â
Mr. Vevone serves as counsel to a number of real estate clients, including regional and national developers and investors, in connection with shopping center and mixed-use development projects. He assists developers in structuring and documenting purchase transactions with investor subscription; financing; and, tax deferred exchange.