Franchising is a complex enterprise and demands very specific expertise to be completed correctly with all the protections and details a Franchisor needs to continue and build a flourishing business. Please be sure to scroll through all our services so you can see why you need a seasoned and experienced hand to help you through all the red tape and pitfalls you might experience during this evolution.
Scott has helped launch, and is always working on the launch of more successful new franchisors. If you are looking to franchise your business, our firm can help guide you along the path for growth and success. Scott Phillip Weber, PA advises its clients regarding the creation of and draft many variations of Franchise Disclosure Documents (FDD), franchise agreements, area developer agreements, area representative agreements, business opportunity disclosure documents, licensing and distributions agreements. The firm also assists those seeking to design their offering to avoid the application of franchising or business opportunity laws, as well as convert existing licensing programs to compliant franchising or business opportunity offerings.
We represent select single and multi unit franchisees, area developers, and master franchisees. We provide in depth analysis of franchise agreements, disclosure documents from the perspective of managing risks, and negotiating the issues most critical to the franchisee. We add value to franchise purchases in assisting them with corporate formations, lease negotiations, non-compete enforcement and the like. Read more on how we can help you buy your first, or many franchises with confidence.
Beginning with his tenure at DLA Piper and now with his own firm, Scott Weber has many years of experience assisting clients with mergers, acquisitions and other corporate transactions involving franchise, business opportunity and distribution companies. He has assisted in the formation of private equity funds, management buy-outs and buy-ins, structured financing, and other transactions. He currently represents select private equity firms in their franchise acquisition efforts, as well as certain new franchise acquisition companies currently seeking targets. Scott follows a “Franchise Legal Team” philosophy to ensure the best Franchise Legal Solutions for clients: Scott Phillip Weber, PA maintains contacts and relationships with numerous accounting firms, other law firms assisting clients with corporate, PE and M&A matters, lenders, angel investors and funds to provide introductions to clients needing capital.
While the law firm of Scott Phillip Weber, PA represents many businesses looking to start/launch a franchise, we also represent many large established franchisors, business opportunity sellers, licensors and distribution systems. For certain clients, Scott serves as “Outside General Counsel” managing and assisting them with a wide variety of legal issues that impact their franchise operations. We have successful and happy clients, who trust us with their legal matters, and value our insights. The firm’s motto is to be knowledgeable, practical and responsive for each and every client, to give them the best tools to start, build, grow, manage and protect their franchise, distribution, business opportunity or licensing enterprises.
Many clients ask, “Why can’t I just download some form, or get a consultant to prepare a form to use as my Franchise Disclosure Document?” The answer is simple: The FDD is only as good as the information contained in it. Your FDD forms the backbone of your franchise offering. Get it “wrong” and you will replicate mistakes, and your liability exposure. Only a lawyer who knows franchise laws can provide you the necessary advice and guidance you need to know what should, or should not be included in your FDD.
Over his many years of practice, Scott has gained experience and insight drafting many different forms of FDDs. He has drafted FDDs for mobile concepts, restaurants, retail, services, medical professions and many other business models, as well as tailored them for franchising on military bases and other alternative venues. Using his Franchise Legal Team approach to Franchise Legal Solutions, Scott stays current on development relating to the FTC Rule, as well as case law interpreting it, and works cooperatively with top notch franchise consultants, and franchise sales network to keep his finger on the pulse of sales trends, and franchisee objections during the sales process. Put Scott’s knowledge to work for you, to make sure your FDD is the best FDD for your needs, and that it meets applicable law. So don’t trust your FDD to any non-lawyer consultant or down-loadable form–there is too much at stake!
Making sure that your Franchise Disclosure Document is done “right” the first time also impacts the speed of your franchise offering. If you are going to offer the franchise in the “franchise registration states,” regulators in those states will have to approve the FDD before you offer or sell franchises. If you prepare the FDD incorrectly from the start, like if it lacks critical information or discloses information in the wrong format, your offering will likely be rejected and delayed. Scott knows what the state regulators are looking for, and what they will accept or reject. Scott can help you navigate the registration process, and we start that process with the preparation of an FDD that is right for you.
The firm also obtains many new clients due to unsuccessful attempts by others to prepare a compliant FDD. It is not unusual for clients to come to Scott Phillip Weber, PA asking Scott to “fix” what they started, because they, their “consultant” or lawyer, failed to properly prepare their FDD. Often they don’t find this out until their Franchise Disclosure Document has been rejected by state franchise regulators, or until they have faced an adverse result in litigation or settlement due to deficiencies in their FDD. For them, Scott will analyze their existing franchise disclosure document, and either fix it or prepare a new document that works. Often, during that process Scott and the consultants he may refer the client to are also able to improve the terms of and saleability of their franchise agreement and ancillary agreements, as well as area development agreements, or representative agreements if their offering includes those structures.
REGISTRATIONS AND EXEMPTIONS
Scott and his assistant have many years of experience preparing and filing franchise registrations. The law firm of Scott Phillip Weber, PA offers cost effective and flat fee registration filings. But, when clients seek exemptions, Scott can put his many years of experience and judgment to use to advise them regarding available exemptions, and the risks and business merits of seeking them.
Some franchise filing or disclosure exemptions or exclusions to consider include:
Large Franchisor Exemptions
Fractional Franchise Exemptions
Experienced Franchisee Exemptions
Franchisor Insider Exemptions
If you are interested in offering a business opportunity, it is important to develop the right offering structure. This requires your team to work closely with your counsel to create legal solutions that fit your needs. The attributes of your offering that you choose to include or avoid will have a great impact on whether it is a business opportunity, franchise or neither.
But the legal structure of your offering is important for many other reasons, including, for example:
Affording opportunity for multi unit operators
Allowing for variations in fee structure
Enabling growth, modification and evolution of the offering
Preparing for turnover, and transfers
Protecting intellectual property and discouraging copycats
Positioning the system for purchase, and perhaps a public offering
Dealing with changes to laws and regulations
Use or development of trademarks, copyright, confidential infomation and trade secrets
Handling changes in liability exposure
Including multi-level marketing aspects.
If you wish to offer or sell franchises in certain states, or to residents of certain states, you will need to file your franchise disclosure document and other required materials with those states’ franchise regulators before your make any offers or sales. Other states require you to meet an exemption from their business opportunity sales laws in order to offer and sell franchises. Often, your compliance with franchise laws will suffice to be exempt from these business opportunity laws. In other instances, a state trademark filing may be needed, or you may be required to make a state business opportunity law registration filing. There are severe consequences for not being registered or exempt before you offer or sell franchises in these states. So, it’s important that you have a franchise compliance plan that ensures you don’t violate these states’ laws. The law firm of Scott Phillip Weber, PA can provide you the comfort of knowing your franchise registrations and renewals are filed and updated in the correct and timely fashion.
Establishing a franchise registration compliance plan
Advising you if you need to register in all registrations states initially, or if you can or should do so as needed
Prepare franchise registrations and renewals
Responding to comment letters
Helping you navigate fee deferral, escrow or bond requests by regulators
Analyzing if any exemptions or exclusions to registration apply
Prepare post-effective and pre-effective amendments
Handling salesperson filings and franchise advertising filings
Reviewing websites and advertising materials for compliance
Training your staff to handle ongoing registrations and renewals, if that’s your desire.
The law firm of Scott Phillip Weber, PA assists existing franchisors with all of the above, plus provides an analysis of their existing registration and renewal costs. Often we are able to demonstrate that our costs are significantly lower than that of other firms. In other instances, existing franchisors are exhausted by prior counsel being unable to obtain speedy registrations, or unnecessary comment letters from regulators. The law firm of Scott Phillip Weber, PA makes the registration process swift and affordable.
Many new and existing franchisors face pressure from the cost of paying for the bulk of their franchise registrations and renewal costs during a short period of the year. Scott Phillip Weber, PA offers new and established franchisors the option to pay via one set monthly retainer fee, and for it we handle all of their registration and renewal needs throughout the year. For most clients, the retainer is $2,000 to $2500 per month, depending on their needs. And, we offer flat fee billing for franchise registrations, renewals, amendments or exemption filings. We can do so on a per-state or multi-state basis.
This article, originally appearing on Fox Business (By Cindy Vanegas, Published March 03, 2011, FOX Business) is a great overview on how to overcome one of the biggest problems facing most franchisors: picking the right franchisees:
After 28 years in business as a pawnbroker, Robbie Whitten decided it was the right time to franchise the company he and his father founded in 1980. Over two years Whitten spent $200,000 in franchise development and in 2010 he sold the first Money Mizer Pawn & Jewelry franchise to two men who he considers ideal partners.
“We asked ourselves: ‘What kind of people are we looking for in franchisees?’” said CEO Robbie Whitten, “Well, we are looking for individuals who are highly motivated, preferably have some corporate background on their resume, and are willing to follow rules.”
While it may be easy to define the ideal franchisee, it may not be easy to turn the wrong one down.
“Everybody wants to close a franchise sale, and no one wants to admit that the guy handing over $50,000 and a commitment of 10 years is the wrong person,” said franchise attorney Scott Weber of law firm Phelps Dunbar.
But it’s the wrong person who can have the biggest impact on the growth of a franchise. “The single most important aspect of quality control is the people you pick as your franchisees,” said Mark Siebert, CEO of franchising consultancy iFranchise.
“The franchisor should be looking for someone who is not like them,” advised Siebert, “[The franchisor] are rule breakers by definition. Franchisors need someone who is willing to follow the system. They should be adaptive, not combative.”
Weber warned someone with the wrong motivation is likely to cost the franchise in legal expenses. “Understanding what makes a good franchisee and what makes a potentially litigious franchisee is just as important as any law that applies to franchising.”
Deciding on a franchisee is very much a judgment call. At iFranchise, Siebert helps clients identify the right buyers by finding comparable franchise systems and conducting profiles of the franchisees in those systems. He also recommends using personality tests such as the Nathan Profiler.
Another way to test potential franchisees is with a pre-sale employment process. According to Weber, the franchisor can require that a potential buyer work at a location prior to finalizing the sale. However, those terms must be disclosed ahead of time. This creates an opportunity to see how well the potential franchisee works with others and adapts to the system.
At Money Mizer, Whitten requires that franchisees train at its corporate headquarters for approximately four weeks and then work in a store for 30 days.
The franchise relationship can last decades, and so the courting period is an opportunity to spot potential weaknesses in the partnership.
“Most conflicts can be addressed with better communication and a better sales process,” said Weber. “Franchise sales departments sometimes create legitimate misunderstandings. Maybe they are describing the system in the wrong way or perhaps are a little too rosy in describing sales prospects.”
Whitten just started putting money into franchise marketing and sales and has been cautious in bringing on additional franchisees before seeing the first one off successfully.
“We wanted our first store to have a year behind them. We wanted to be able to support our franchisee.”
The law firm of Scott Phillip Weber, PA offers excellent quality, up to date franchise and business opportunity disclosure documents, tailored to your needs. We offer hourly and flat fee billing, and for the most part, can complete most disclosure documents within a month or so. Don’t settle for cookie cutter documents. Rely on Scott for sound advice and judgment to produce a disclosure document that protects your company,
Franchising on Military Bases and other governmental institutions is a complex endeavor. Let the law firm of Scott Phillip Weber, PA assist you with doing it right the first time. Scott Weber has represented franchisors in efforts to place locations on military bases, airports, governmental installations and other non-traditional venues. He is a speaker and writer on the topic, having presented at the International Franchise Association’s Legal Symposium.
In addition to his franchise practice, Scott Weber also advises government contracting clients with efforts in the US and abroad.
ENFORCEMENT, DISPUTES AND TERMINATIONS
Scott Weber has extensive experience dealing with enforcement, disputes and, when necessary, terminations in franchise, business and distribution systems. When embarking on such a path, it is important for a company to know its rights, and know when and if to enforce them. Let’s Scott’s experience and negotiation skills help you avoid, and quickly end disputes. And, when necessary, Scott can assist with your efforts to obtain injunctions, enforcing non-competition agreements, and obtaining damages and fees. Our firm maintains contacts with local counsel throughout the US and abroad, and can counsel you on who to rely upon for state specific needs.
FRANCHISE AND BUSINESS LAW AVOIDANCE
For many clients, the goal is to design a business system that allows them to meet their business objectives while avoiding application of franchise or business opportunity sales laws. Avoidance of these laws is not always possible without unwanted changes to the business plan. There are many traps for the unwary. Because so, Scott often advises clients who have, on their own, unsuccessfully attempted to avoid such laws, and who now need our firm’s help in fixing their prior mistakes. So if you are thinking of creating a licensing or multi party system that avoids franchise or business opportunity laws: Don’t go it alone, and get assistance early.
However, for many clients Scott can, from the onset, devise an alternative that is both legally compliant and practicable.
Some of these solutions may include:
Fee deferral programs
Commissioned sales agent programs
Limitations on use of the marks
Curtailing controls or assistance
Utilizing exemptions or exclusions from such laws.
Franchisors: Do you need help enforcing your Franchise Agreement? Scott has experience with litigation, arbitration and mediation of franchise disputes.
He is aggressive, knowledgeable and can help you resolve disputes in a cost-effective and practical manner. Through the years he has helped franchisors obtain:
Temporary Restraining Orders
Preliminary and Permanent Injunctive Relief
Lost Future Profits/Future Royalties
Unpaid Past-Due Royalties
Scott has experience dealing with single and multiple franchisee break aways, coordinated efforts to undermine the franchise system, termination, abandonment, failure to comply with system standards and the like.
If you need assistance, call the law firm of Scott Phillip Weber, PA today at (813)337-6650, or e-mail
Franchisees: Are you looking to part ways with your Franchisor? Were you misled in the purchase of your franchise?
You may have the ability to leave the franchise system, or receive compensation. But, if you delay, your claims could be time barred.
While this firm primarily represents franchisors, Scott will handle select franchisee litigation. Call Scott for a private confidential consultation.
Getting in touch is easy. Use the form below
& request a free consultation today.
Franchise attorney © 2018 | All Rights Reserved. The information you obtain at this site is not, nor is it intended to be, legal advice. Many factors contribute to providing legal advice, including the specific facts of a situation, as well as the state or location involved. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and we welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established
MANDATE TAX AND ACCOUNTING FIRM
26 New Mandate St, New York
+1 (312) 555-2500