Franchise Law Q&A
Raleigh, North Carolina Business Attorneys Focus on Franchise Law
Wake County Law Firm Answers Franchise Questions
North Carolina franchise law can be quite complex, and there are many state and federal laws governing franchising that business owners need to understand when they are contemplating such an opportunity.
What are the Benefits to Operating a Franchise?
There are significant benefits to operating a franchise, including:
- Franchisors use other people’s money to expand their business.
- Franchise fees and ongoing royalties allow franchisors to grow without sacrificing control.
- Franchisees benefit by having an established business model to follow, with centralization of critical functions including marketing, training, support, customer lead generation, websites, and call centers.
- The influx of capital funds marketing improves the quality of goods and services, and also builds the brand.
How Does North Carolina Law Treat Franchises?
North Carolina does not have a separate statute governing franchise relationships, but the principles set forth in North Carolina law dealing with monopolies, trusts, and consumer protections may apply. Typically, a state’s franchise laws apply if the:
- Offer or sale of the franchise is made in the state.
- Franchised business will be located in the state.
- Franchisee is a resident of the state.
What Constitutes a Franchise Under the FTC Franchise Rule?
Under the FTC Franchise Rule, there are three elements of a franchise:
- Trademark – the distribution of goods or services are associated with the franchisor’s trademark or commercial symbol.
- Significant control or assistance – the franchisor exercises significant control over or gives significant assistance to the franchise.
- Required payment – the franchisee made a payment to the franchisor of at least $500 within the first six months of operation of the franchised business.
If all these elements are present, the relationship will be considered a franchise under the FTC Franchise Rules.
Contact Our North Carolina Franchise Lawyers Today
Do you have questions about North Carolina franchise law? The experienced attorneys at Law Offices of Robert Crawford are dedicated to helping business professionals in Raleigh and throughout Wake County, North Carolina get answers they need regarding franchise law. Contact our firm online or call 919-296-8508 to schedule your initial consultation today.
