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Legal Counsel FAQ's

What is a New Jersey "closely held company?"

A New Jersey closely-held company is a company that…

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What is secondary meaning in relation to trademarks?

Secondary meaning is the power of a name or other configuration to symbolize a particular business, product, or company.

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What is "Prop 65"?

Prop 65 is California's Proposition 65.

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Must a FDD be Amended Prior to Negotiating and Changing a Franchise Agreement?

No - if the change benefits the franchisee and was negotiated by the franchisee.

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What is a Trade Secret in a Franchise?

When it comes to franchises and franchise systems "trade secrets" constitute information that…

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How much should I tell potential franchisees about costs at a franchise trade show?

Well, first and foremost you must absolutely ensure that whatever information that you discuss and provide to prospective franchisees is disclosed in your FDD.

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When does a franchise amendment application need to be filed?

A franchise amendment application needs to be filed if you have a franchised business in a franchise registration state and a material change has been made to your Franchise Disclosure Document ("FDD").

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What information is required for franchise renewal in California?

The California franchise renewal process requires that a California Renewal Application be submitted in the same format as the original registration and must also include all documents that are required for initial registration.

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What does "nonrenewal" of a Franchise Mean and Involve?

If you are in the business of selling franchises, there will come a time when you must renew the franchise agreement with your franchisees.

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What FDD Item 19 Disclosure is Required if You Don't Make a Financial Performance Representation?

FDD Item 19 relates to a franchisor's financial performance representations.

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What is a Franchisor's "Affiliate" under the Federal Franchise Rule?

Under the Federal Franchise Rule an affiliate is defined as a person…

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What Franchisor Affiliates Must be Disclosed in a FDD?

For both start-up and established franchisors the disclosures contained in your Franchise Disclosure Document ("FDD") apply not only to the primary corporate entity that serves as the franchisor but also "affiliated" entities.

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What do Trademarks Cover?

Trademarks are most commonly associated with the name of your business.

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What kind of financial statements do I need for my FDD?

As a franchisor, a Franchise Disclosure Document (FDD) requires you to include the following financial statements…

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Does Extending or Renewing a Franchise Agreement trigger a Franchisor's FDD Disclosure Obligation?

No. Under the Federal franchise Rule the extension or renewal of a franchise agreement does not constitute a franchise sale and therefore does not trigger a franchisors FDD disclosure obligation provided that there has been no interruption in the franchisee's business operations and provided that the renewal agreement does not differ materially from the original agreement.

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Does the transfer of an existing franchise trigger a franchisor's FDD disclosure obligations?

No. Under the Federal franchise Rule a franchisee's transfer of an existing franchise agreement does not constitute a franchise sale and therefore does not trigger a franchisors FDD disclosure obligation provided that the franchisor has not had significant involvement with the prospective transferee.

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