Franchise

Lewis D. Schwartz has been practicing franchise law since 1987 and represents both franchisors and franchisees.  He has helped clients begin franchising businesses from scratch as well as begin franchise programs in established businesses.  He has also reviewed and advised many clients looking to invest in a franchised business. Lewis has been a member of the American Bar association Forum on Franchising since 1987 and is past chairman of the Tarrant County Bar Association Franchise and Distribution Section.  These groups keep him informed on the latest developments in the law, and help him to build relationships with colleagues and industry leaders that often improves the work Lewis does for his clients.

Franchisor Practice

If you are thinking of expanding your business, Lewis can help you assess whether your business would benefit from having a franchise program, and, if so, assist you with creating it, including performing the following services:

  • Reviewing trademarks and other intellectual property and, if necessary, obtaining a federal registration of trademarks and service marks used in the business
  • Drafting franchise agreements and related agreements
  • Drafting the Franchise Disclosure Document (“FDD”) required by the Federal Trade Commission (“FTC”) that must be provided to prospective franchisees (formerly the Uniform Franchise Offering Circular or UFOC)
  • Registering the franchise in any states that require registration and in which you wish to offer franchises
  • Providing ongoing support for the annual updating of the FDD and any state registration renewals
  • Interfacing with your accountant and/or auditor in connection with the preparation of your financial statements and required audits

While not all licensing programs are franchises, often times businesses are unaware that they are operating a franchise program.  This can lead to severe penalties, both from the FTC or state enforcement agencies, as well as potential liability, or unintended rights being afforded, to the business’s licensees (such as damages for failing to provide disclosure information or a right to cancel their agreements and operate on their own.)  If you are already operating a licensing or distribution oriented business, Lewis Schwartz can advise you on whether your current business model is in violation of franchise or similar laws and assist you in limiting that liability.

Franchisee Practice

If you are thinking of becoming a franchisee, Lewis can assist you in reviewing the FDDs and franchise agreements that you receive, and, if you choose, to negotiate the franchise agreement and related documents with a franchise you want to purchase.  As part of the franchise review process, Lewis will itemize any issues that could be a problem for you and explain the consequences of accepting certain provisions in the agreements.  As part of the initial review of a franchise, you will receive:

  • An itemized memo detailing issues of concern in the FDD and the franchise and related agreements
  • A list of questions for you to ask the franchisor, current franchisees and former franchisees, if any
  • A meeting in which the issues are explained to you and your questions answered

If you are a current franchisee in a franchise system, Lewis can review your situation and advise you on any issues you may have, including problems with a franchisor not performing its obligations or potential problems due to a franchisor selling or operating competing units too close to your business, insisting on you doing things not required in the franchise agreement, or any other conflict you may be having.  If necessary, Lewis will represent you, with other members of the firm if necessary, in resolving the conflicts through mediation, arbitration  or litigation.