Franchising:

Franchising is a form of business by which the owner (“franchisor”) of a product, service, or method obtains distribution through affiliated dealers (“franchisees”).  The product, method, or service being marketed is usually identified by the franchisor's brand name, and the franchisee is often given exclusive access to a defined geographical area.  The franchisor offers assistance in organizing, training, merchandising, marketing, and managing the business in return for consideration--usually in the form of royalties.

The Federal Trade Commission ("FTC") regulates franchising in the United States.  The agency requires that a franchisor prepare a comprehensive disclosure document called a Franchise Disclosure Document before offering a franchise.  The document, among other things, disclosures the potential risks and benefits in the investment and operation of the franchisor's business.  It also includes the franchise agreement.  At the state level, twenty-three states, including Illinois, require filing the Franchise Disclosure Document with their regulatory authorities before offering franchises in that particular state. 

Additional concerns include: 1) the drafting or negotiating of the franchise agreement itself; 2) concerns over trademarks and other intellectual property rights; 3) real estate issues; 4) business entities, etc.

If you require assistance in navigating the franchise process, contact Donald R. Simon, Esq. to schedule an assessment or consultation.