Short answer. There is no franchise-specific E-2 rule. The word “franchise” does not appear anywhere in 9 FAM 402.9 or 22 C.F.R. § 41.51, so a franchised business is analyzed under exactly the same tests as any other. What the Franchise Disclosure Document gives you is evidence, and different Items carry different parts of the…
Continue reading ›This post compares Texas and Illinois law; figures and deadlines are stated generally, so confirm the current rule in the relevant state before acting. My franchise practice spans Texas and Illinois, and the two states sit at nearly opposite ends of American franchise regulation. First-time franchisors expanding from one into the other are routinely surprised…
Continue reading ›This post discusses Texas and federal law. Your concept works. Customers ask about opening one in their town. Franchising can be the way to grow with other people’s capital and energy, but the moment you sell the right to operate under your brand, you step into a regulated world with disclosure obligations and documentation requirements…
Continue reading ›This post discusses Texas and federal law. Buying a franchise means signing two of the longest documents most people will ever encounter: the Franchise Disclosure Document and the franchise agreement. The FDD discloses the franchise system’s fees, litigation history, obligations, financial performance representations, and more. It exists because regulators decided buyers deserve the full picture,…
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