North Carolina Franchise Law Firm Focuses on Franchising Issues

Winston-Salem Business Attorneys Represent Business Clients

In 1970, California enacted the first franchise law, and 15 states and the Federal Trade Commission (FTC) have since adopted franchise disclosure, registration, or notice laws and regulations. These laws and regulations are intended to supply information to the investor before he commits to becoming a franchisee, distributor, or dealer.

In 2008, the FTC adopted the Amended FTC Franchise Rule. Under this rule, any continuing commercial relationship or arrangement is considered a franchise when the terms of the offer or contract specify that:

• The franchisee will obtain the right to operate a business or sell goods or services that are identified or associated with the franchisor’s trademark.
• The franchisor has the authority to exert a significant degree of control over the franchisee’s method of operation.
• The franchisee must make or commit to a required payment to the franchisor of $500 or more at any time before, or within six months after, commencing operation of the franchisee’s business.

Violations of the Amended FTC Franchise Rule

All three of these elements must be present in order for a franchise to exist, and if any one element is missing, the business arrangement is not a franchise. Failure to comply with the Amended FTC Franchise Rule is a violation of Section 5 of the FTC Act, and violators may be subject to penalties of up to $16,000 per violation.

Contact Our Winston-Salem Franchise Attorneys Today

Are you looking for competent legal advice regarding a franchise issue in North Carolina? The business attorneys at Law Offices of Robert Crawford are committed to representing professionals throughout Winston-Salem in a variety of business matters, including franchising. Contact our firm online or call 919-296-8508 to schedule your initial consultation today.