We assist franchisors in complying with the obligations under the FTC Rule and applicable state laws governing the sale of franchises in those states which have registration statutes.
In the ordinary course, we draft franchise agreements and franchise disclosure documents for flat fees, which are payable over the course of the engagement. By using predictable flat fees, businesses can more effectively budget the funds necessary to roll out a franchise concept.
For established franchisors, we review existing franchise documents for regulatory compliance and other business or operational issues, and provide detailed comments or revisions with respect to existing documents.
For many clients, we perform national and state-specific registrations of their franchise programs. For these projects, we negotiate a flat fee based on filing status (initial or renewal), and the particular states in which the opportunity will be registered. We have a disclosure team lead by attorneys who see to the timely updating and submission of registration documents. In addition, we also prepare and file Salesmen Disclosure Forms and Broker Registration Forms as necessary.
We began offering our franchisor clients a comprehensive training seminar. We use a proprietary comprehensive workbook known as the Franchise Sales Desk Reference, in which we discuss regulatory compliance, including compliance with the FTC Rule and state statutes governing the sale of franchises. Our Franchise Sales Desk Reference has become a valuable resource for many of the firm’s clients.
Consider the timing and scope of the sales compliance training offered to your sales personnel and for that matter, any area developers who have resale rights and responsibilities. Ask yourself whether that training is adequate in light of our incredibly litigious society and the fact that a vast majority of claims asserted by franchisees against franchisors include claims of: (1) improper disclosure; and (2) unlawful earnings claims.
With respect to the latter, the most recognized franchisee litigators claim that, in the absence of an earnings claim, they can find some affirmative statement or admission that could arguably give rise to a claim, given that federal and state laws have created an incredibly expansive definition of conduct which could constitute an earnings claim. Moreover, most improper disclosure claims are predicated on a failure to give the franchisee an updated document reflecting material changes, updating earnings claim information where required, a failure to use the properly registered document in registration states, and failing to document the making of timely disclosures, the lack of any earnings claims and any negotiated changes.
Given the recurring nature of these claims, we offer our franchisor clients franchise sales compliance seminars, onsite or locally. We use a proprietary comprehensive workbook known as the Franchise Sales Desk Reference, which includes modules on registration and disclosure, earnings claims, advertising, compliance certifications, negotiated changes, misrepresentation and omissions (the “Program”). We have also developed an optional pre-test designed to determine a person’s level of knowledge going into the Program and a test at the conclusion of the Program to determine the proficiency level at the conclusion of the Program. We can tailor a training program to your specific needs, based on your availability, in a manner which maximizes the number of participants from your organization who can attend. For example, if you do not use an earnings claim, we will consult with you with respect to specific measures of performance or an alternative means of casting your data, in an effort to cast your opportunity in the most favorable light. If you use an earnings claim, we can assist you in defining the information which must be included in the claim and the permissible uses of the claim.
At your request, we can also create a training program which you can offer in conjunction with your annual convention for your inside sales staff, your master franchisees or area developers with sales responsibilities.
We can tailor a training program to your specific needs, based on your availability.