Franchises in the United States
A franchise is an agreement where one business (e.g., General Motors) licenses the right to use it name and/or to sell its products to another business (e.g., your local auto dealership).
Federal law requires franchises to provide disclosure statements to potential buyers (16 CFR 436.1 et seq.). The Federal Trade Commission oversees the law. The FCC-approved disclosure statement is called a “Franchise Disclosure Document” or FDD, and the company’s Franchise Agreement must be attached as Exhibit A. The FDD format became mandatory on July 1, 2008. Before then, the common format was the “Uniform Franchise Offering Circular” (UFOC) drafted by the North American Securities Administrators Association. Canadian franchise file a “Canadian Disclosure Document.”
There is no requirement that Franchise Disclosure Documents (FDDs) be filed with the Federal government. However, several states require franchise filings, including California, Hawaii, Illinois, Indiana, Maryland, Michigan (notice only), Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin.
Legal Materials
You may be able to get copies by contacting the relevant state agency (see this list of State Offices Administering Franchise Disclosure Laws) or by contacting one of the specialized document retrieval services, such as Franchise-Insider.com; FRANdata; and FranchiseHelp. If the franchise is registered in California, you can search the free Cal-EASI database, which includes PDFs of filed documents.
In some cases, an FDD may be posted on the franchisor’s web site.
The IFA International Franchise Association’s Find a Franchise database provides contact information and basic information about the business (year started, # of franchises, etc.).
Compilations of Franchising Laws: The relevant Federal and state laws and regulations are compiled, with explanations, plus forms and lots of U.S. agency materials, in the CCH Business Franchise Guide and Matthew Bender’s Franchising. The CCH is available as a looseleaf, a CD-ROM, on Lexis (CCH;CCHTRD) and on CCH’s subscription-based Intelliconnect. The Bender is published as a looseleaf, as a CD-ROM and on Lexis (2NDARY;FRANNG). For a more affordable alternative, consider the Franchise Desk Book: Selected State Laws, Commentary and Annotations (ABA).
Directories: The venerable directory of franchises was Bond’s Franchise Guide(Source Media), which was last published in 2009 (20th ed.). Bond’s is a good place to get historical information on franchises. For current information, see the Franchise Directory on Source Media’s WorldFranchise website.
Forms:Some franchising forms are available in the “Franchising” section of Eckstrom’s Licensing in Foreign and Domestic Operations – Forms, which is available in print (from West) and on Westlaw (ECKLICNFO-FRAN).
Rankings and Surveys: Franchise Times compiles an annual list of the 200 largest franchises ranked by sales. Franchise owner satisfaction surveys are available fromFranchise Research Institute and Franchise Business Review.
Treatises: Franchising treatises include Franchising Law: Practice and Forms (Specialty Technical Publishers) and Franchising (LexisNexis/Matthew Bender). Aspen Publishers has a series of books on International Franchising in Industrialized Marketsand International Franchising in Emerging Markets.
You can find a general discussion of franchising laws in American Jurisprudence 2d. You can find a discussion of the franchising laws for a particular state in the relevant state’s legal encyclopedia (e.g., California Jurisprudence or the Maryland Law Encyclopedia).
Franchises and the State Laws
Select from the list of U.S. States below for state-specific information on Franchises:
- Franchises in the Subject Index of the Alabama Portal
- Franchises in the Subject Index of the Alaska Portal
- Franchises in the Subject Index of the Arizona Portal
- Franchises in the Subject Index of the Arkansas Portal
- Franchises in the Subject Index of the California Portal
- Franchises in the Subject Index of the Colorado Portal
- Franchises in the Subject Index of the Connecticut Portal
- Franchises in the Subject Index of the Delaware Portal
- Franchises in the Subject Index of the Florida Portal
- Franchises in the Subject Index of the Georgia Portal
- Franchises in the Subject Index of the Hawaii Portal
- Franchises in the Subject Index of the Idaho Portal
- Franchises in the Subject Index of the Illinois Portal
- Franchises in the Subject Index of the Indiana Portal
- Franchises in the Subject Index of the Iowa Portal
- Franchises in the Subject Index of the Kansas Portal
- Franchises in the Subject Index of the Kentucky Portal
- Franchises in the Subject Index of the Louisiana Portal
- Franchises in the Subject Index of the Maine Portal
- Franchises in the Subject Index of the Maryland Portal
- Franchises in the Subject Index of the Massachusetts Portal
- Franchises in the Subject Index of the Michigan Portal
- Franchises in the Subject Index of the Minnesota Portal
- Franchises in the Subject Index of the Mississippi Portal
- Franchises in the Subject Index of the Missouri Portal
- Franchises in the Subject Index of the Montana Portal
- Franchises in the Subject Index of the Nebraska Portal
- Franchises in the Subject Index of the Nevada Portal
- Franchises in the Subject Index of the New Hampshire Portal
- Franchises in the Subject Index of the New Jersey Portal
- Franchises in the Subject Index of the New Mexico Portal
- Franchises in the Subject Index of the New York Portal
- Franchises in the Subject Index of the North Carolina Portal
- Franchises in the Subject Index of the North Dakota Portal
- Franchises in the Subject Index of the Ohio Portal
- Franchises in the Subject Index of the Oklahoma Portal
- Franchises in the Subject Index of the Oregon Portal
- Franchises in the Subject Index of the Pennsylvania Portal
- Franchises in the Subject Index of the Rhode Island Portal
- Franchises in the Subject Index of the South Carolina Portal
- Franchises in the Subject Index of the South Dakota Portal
- Franchises in the Subject Index of the Tennessee Portal
- Franchises in the Subject Index of the Texas Portal
- Franchises in the Subject Index of the Utah Portal
- Franchises in the Subject Index of the Vermont Portal
- Franchises in the Subject Index of the Virginia Portal
- Franchises in the Subject Index of the Washington Portal
- Franchises in the Subject Index of the West Virginia Portal
- Franchises in the Subject Index of the Wisconsin Portal
- Franchises in the Subject Index of the Wyoming Portal
Franchises (Cable Systems)
This section introduces, discusses and describes the basics of franchises. Then, cross references and a brief overview about Cable Systems is provided. Finally, the subject of Communications Law in relation with franchises is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.
Resources
See Also
Company Information
Federal Trade Commission
Further Reading
- Information about Franchises in the Gale Encyclopedia of American Law.