Before we can really begin drafting a franchise agreement or a franchise disclosure document, we need to understand what kind of franchise system you want to create.  That means we need to talk about whether you want to use a master franchise model, an area development model, an area representative model or a single unit franchise model.  Or, maybe you have a more unique structure in mind with different types of franchises within the same system like a hub-and-spoke model or standard and limited offering franchises within the same system.  The model you choose will determine the documents you need.

Once we have figured out what franchise model you want to use, we will need to work through the operational issues that need to be addressed in the franchise agreement and franchise disclosure document, like:

• How will the franchisee’s site be selected?
• Will it be a retail site?
• Will the business be operated out of the franchisee’s home?
• Is this a service business that will be defined less by a physical location and more by a service area?
• What types of proprietary information are key to the system?
• Is there a proprietary software program that is critical to the franchise system?
• Are your relationships with suppliers and other vendors key to the success of the franchised business?
• What sort of training and support do you intend to offer to franchisees?

The list of details needed to complete the franchise documents is quite lengthy.  Some of our clients prefer to sit down with a questionnaire that we provide to clients and write out their ideas at their leisure.  Other clients would rather talk through each issue in detail to be sure that they understand the implications of each choice.  We are happy to work with you in whichever way you feel most comfortable.

After we have a pretty good idea what you want your franchise system to look like, we can start drafting.  We will draft a customized franchise agreement using the information you provide and provide it to you for your review and comment.  You will have questions.  That’s OK.  You will change your mind about what you want to include in your franchise agreement.  That’s OK, too.  The first draft of the franchise agreement is exactly that — a draft.  We will take the time to work through your comments and questions and revise the franchise agreement accordingly.  For some clients, we may go through several drafts.  Ultimately, we want you to have a franchise agreement you are comfortable with.

When the franchise agreement (and any other agreements, like a development agreement) is close to complete, we then start drafting a franchise disclosure document, which will incorporate — in large part — information from the franchise agreement.  The process with the franchise disclosure document is the same as with the franchise agreement.  We provide a draft for your review and comment, work through any questions and revise the franchise disclosure document until you have a document you are comfortable with.

When the franchise agreement (including its attachments) and franchise disclosure document is finished, we will provide you with detailed instructions about how to use the document to comply with the FTC Franchise Rule and the various state franchise (and business opportunity) laws.  And, in states that require that you register the franchise disclosure document or file something else with a state agency, we will prepare the necessary materials for filing (in those states you wish to file).