Federal and Florida Franchising Law

Federal and Florida franchising law can be complex. There is little uniformity among state regulations regarding franchising—which makes it easy for a business to run afoul of the different rules that exist. Many states have franchise and business opportunity statutes that require disclosure by the offering party. In some states, the laws apply to limited types of franchises, while in others the laws may apply only to transactions within their borders. Some states make the failure of a franchisor to provide an offering circular or disclosure document an automatic violation of state law.

The best way to ensure you are meeting the requirements of any location where you plan to offer or be involved in a franchise is to seek out the advice of an attorney with franchising experience, including multi-state franchising.

Federal laws on franchising

The Federal Trade Commission (FTC) enforces federal laws and rules regulating franchises. These rules apply only to franchises that are in or affecting interstate commerce. The FTC requires franchisors and sellers of certain other business opportunities to disclose certain material facts before a sale can be closed. In addition, the FTC has authority to impose fines of up to $10,000 per day, and also can order rescission, reformation, and payment of refunds and damages. Finally, the FTC can issue cease and desist orders against franchisors who fail to follow disclosure requirements.

Florida laws on franchising

Under Florida law, a franchise is a commercial agreement between two or more persons that gives the franchisee a right to do business using the services of the franchisor. The independent business of the franchisor is a component of the distribution system of the franchisor. The franchisee relies on the franchisor to supply the basic goods.

It is unlawful to make any misrepresentations about the chances for success, the required total investment, or the efforts of the franchisor to establish other franchises in the same market when selling a franchise in Florida. Florida also regulates the sale of business opportunities that may include some franchise relationships.

Seek out an experienced Florida franchising attorney for help

Your best bet in understanding all elements of franchising, including the interplay between state and federal regulations, is to seek out an attorney skilled in franchising law. The attorneys of Protonentis & Remley, PA have years of experience with Florida franchises and franchising. If you have questions about franchises, do not hesitate to speak to a skilled and experienced Florida franchising attorney.