The Business Litigation Attorney and Franchises in Florida

The Federal Trade Commission states that a franchise is a business relationship with three specific elements:

           ·          The licensing of a right to use a trademark or trade name

           ·          The payment of a franchise fee (including up front and ongoing fees)

           ·          Some type of marketing plan, control, or assistance on the part of the franchisor

Franchises are governed by federal and state laws. A business attorney may deal with franchise disputes as part of his or her practice.

Franchise Disclosure Documents

Franchise disclosure documents (FDDs) require disclosure of 23 separate items to prospective franchisees. One of the most important disclosures is representations of financial performance, and a franchise lawyer often gets involved with disputes regarding this particular disclosure.

Unfair or Deceptive Practices

Franchisors must be very careful not to make assertions or statements that contradict the statements in the FDD. When a franchisor makes general misrepresentations, overstatements, or misstatements, he or she may be the target of litigation by a franchisee who expected a more favorable financial outcome. A franchisor's assertions may or may not rise to the level of fraud.

Is it Fraud?

A business litigation attorney with experience in franchise litigation may have to deal with franchisee allegations that a franchisor committed fraud. Fraud indicates intentional false statements were made, and is harder to prove than assertions of other state franchise law violations. A franchise lawyer works with a franchisee and advises whether state franchise laws were breached or whether a franchisor committed fraud by deliberately making false statements in order to sell a franchise.

Violations of Florida's Franchise Act

Charges of unfair or deceptive practices often have to do with financial performance disclosures in an FDD. A franchisor is not allowed to provide a prospective franchisee with earnings or sales projections beyond what is required in the FDD, and information disclosed in an FDD must not be misleading. If you are thinking of buying a franchise, your smartest move is to work with a franchise attorney from the very beginning to prevent misunderstandings and to know how to interpret information in your FDD.