Franchise Licensing (Part A)

When you begin to license certain aspects of your business, such as your business name, its trademarks, products and services, etc., you may be entering into the territory of starting a business franchise. If you do enter into this territory, it is likely that you will have to abide by U.S. franchise laws.

While these laws may vary from state to state, there are general rules and regulations that a franchisor is obligated to follow. If you have questions about whether you should be licensed to franchise in New York, and what this would entail, you can get the expert advice of a New York franchise attorney.

What is a franchise?

According to the U.S. Federal Trade Commission (FTC), a franchise is an oral or written agreement that contains the following 3 elements:

• The franchisor offers the right to distribute goods and/or services associated with or identified by the franchisor's trademark or other commercial symbol;
• The franchisee is required to make any direct payment to the franchisor or its affiliates; and
• The franchisor exercises significant control over, or offers significant assistance to, the franchise

Despite any written classification as to the nature of a business relationship, a relationship which contains these 3 elements is still a franchise relationship. If you are unsure about whether you have entered into a binding franchise relationship, you can consult a New York franchise lawyer.

If you are in fact in a franchise relationship, U.S. law requires that you register and provide a pre-offering disclosure, as well as register your offers of assistance, and your marketing plans to help others establish a business. A New York franchise lawyer can help you meet the necessary requirements.

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