Florida Franchise Lawyers
Cantrell Schuette is a recognized leading Florida franchise law firm, focused on franchise disclosure documents and high stakes disputes involving claims of franchise fraud, recission, termination rights, and other franchisee-franchisor disputes.
Award Winning Franchise Attorneys in Florida
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Cantrell Schuette, P.A. stands as one of Florida’s leading firms for franchise law and litigation, offering trusted expertise to help clients navigate the complexities of franchising. Our proven track record speaks to our commitment to legal excellence and makes us the ideal partner for franchisors and franchisees alike.
For those Franchisor’s seeking to expand their brand or Franchisees seeking to join a franchise network, an understanding of franchise law is essential. Franchise relationships are governed by a range of federal and state regulations, covering everything from disclosures and agreements to territory rights and intellectual property. With years of dedicated experience in franchise law, Cantrell Schuette, P.A. provides clients with the knowledge and guidance needed to make informed decisions and reach their business goals with confidence.
Our approach is client-centered and solution-driven. Each of our team members is committed to understanding clients’ unique needs and providing tailored strategies to meet them. Whether you’re expanding your franchise, ensuring compliance, or navigating a legal dispute, we offer focused support at every step.
If you’re entering a new franchise relationship or facing a franchise dispute in Florida, contact us today. Our team is ready to provide the skilled legal representation you need to protect your interests and achieve a successful outcome. Contact us at coordinator@caklegal.com or 1-877-858-6868.
Overview of Franchise Law in Florida
Navigating state-specific laws and federal franchise laws is key for your business’s success and longevity. From complying with regulations to resolving disputes with franchisors, it is essential you understand your legal rights and obligations in franchising.
While Florida did enact the Florida Franchise Act, which governs the franchise relationship and seeks to protect franchisees from unfair practices by franchisors, franchising in Florida is primarily regulated by the same laws that apply to other business owners and is governed by the Federal Trade Commission (FTC) Franchise Rule, discussed below.
Florida Franchise Act
The Florida Franchise Act seeks to protect franchisees from unfair practices by franchisors. The Act prohibits franchisors from certain actions, like imposing unreasonable restrictions on the transfer of a franchise or terminating or refusing to renew a franchise agreement without reasonable cause to do so. The Act also requires a franchisor to register their franchise with the Florida Department Agriculture & Consumer Services before offering or selling franchises in the state. Pursuant to the Act Franchisors must also provide prospective franchisees with a Franchise Disclosure Document (FDD) before executing any agreements or making any payments.
While Florida did enact the Florida Franchise Act, which governs the franchise relationship and seeks to protect franchisees from unfair practices by franchisors, franchising in Florida is primarily regulated by the same laws that apply to other business owners and is governed by the Federal Trade Commission (FTC) Franchise Rule, discussed below.
Sale of Business Opportunities Act
Florida also enacted the Sale of Business Opportunities Act, which is a business opportunity law that applies to the sale of franchises and, like the Florida Franchise Act, requires franchisors to file an annual Franchise Exemption Notice with the Florida Department Agriculture & Consumer Services. Filing an annual Franchise Exemption Notice certifies that your franchise offer complies with the FTC Franchise Rule.
Therefore, as a franchisee, your first step toward business formation in Florida is to comply with state, local, and federal business laws. As a franchisor, it is similarly your responsibility to comply with all Florida state business laws including: incorporating your business, registering your business name, paying taxes, and following all relevant state laws – such as those related to the sale of goods, the sale of liquor, etc.
While a franchisor is responsible for compliance with the general laws that apply to all franchisees in the franchised territory, it is the responsibility of the franchisee to maintain compliance with local laws and ordinances that may apply to their franchise, such as those affecting property maintenance, building construction and usage, hours of operation, land use, and signage.
The Florida Department of Agriculture & Consumer Services regulates and oversees the enforcement of Florida’s Business Opportunity Law.
What is the FTC Franchise Rule?
According to the FTC, “[t]he Franchise Rule gives prospective purchasers of franchises the material information they need in order to weigh the risks and benefits of such an investment . . . the Rule requires franchisors to provide all potential franchisees with a disclosure document containing 23 specific items of information about the offered franchise, it’s officers, and other franchisees.”
Those 23 specific items of information about the offered franchise include:
- Franchisor and any parents, predecessors and affiliates
- Outlets and franchise information
- Business experience
- Litigation
- Franchisor’s assistance, advertising, computer systems and training
- Franchisee’s obligations
- Obligation to participate in the actual operation of the franchise business
- Initial fees
- Other fees
- Estimated initial investment
- Financial statements
- Financing
- Receipts
- Renewal, termination, transfer and dispute resolution
- Bankruptcy
- Trademarks
- Contracts
- Territory
- Public figures
- Patents, copyrights and proprietary information
- Restrictions on what the franchisee can sell
- Restrictions on sources of products and services
- Financial performance representations
A key requirement of the Franchise Rule is the Franchise Disclosure Document (or FDD).
Considerations for Franchisors in Florida
Franchisors must do their due diligence in complying with the FTC Franchise Rule and FDD, as well as with the Sale of Business Opportunities Act exemption process.
Florida is a franchise filing state, meaning franchisors must make an annual filing with the Florida Department Agriculture & Consumer Services before offering or selling franchises in the state.
How do you qualify for a Franchise Exemption?
To qualify for an exemption from the Sale of Business Opportunities Act, your franchise offering must meet and satisfy the FTC Franchise Rule. Among other things, this means that franchisors maintain and properly disclose a current and properly issued Franchise Disclosure Document (FDD) to prospective franchisees.
When filing your annual Franchise Exemption Notice with the state you will be providing and attesting to the following information:
- The legal name of your franchise company;
- The brand name of your franchise;
- The business address and contact information for your franchise company;
- The tax identification number of your franchise company; and
- An Acknowledgement signed by an officer of your franchise company that your franchise offering complies with FTC guidelines as to the definition of a franchise and that your offering complies with the Federal Franchise Rule.
You must file your exemption with the Florida Department of Agriculture & Consumer Services and a required filing fee of $100 payable to “FDACS” must be mailed to: FDACS, P.O. Box 6700, Tallahassee, FL 32399-6700.
Because your exemption is only valid for one year, you should submit your renewal application approximately 60 days before exemption expiration to ensure there is no gap in compliance.
Once completed and submitted your application will be assigned to a regulatory specialist and you will generally receive a response within 4-6 weeks. Upon review and approval, you will receive a notice advising that you have been granted an exemption under Section 559.802, Florida Statutes and the notice will advise you of the effective date and the expiration date.
Considerations for Franchisees in Florida
Franchisees should review the FDD carefully as it provides the primary protections for franchisees. Franchisees are responsible for adhering to brand guidelines and upholding contractual financial commitments so ask lots of questions. As a franchisee you are entitled to receive an FDD at least 14 days before you are asked to sign any binding agreements or make any payments and if you do not receive one do not be afraid to ask for it. The franchisor’s conduct regarding the FDD may also provide some insight into how they do business and may raise some red flags early on that are important to take into consideration.
Much like the FDD, the Franchise Agreement is also of significant importance as it outlines the terms and conditions of the transaction. The Franchise Agreement includes terms like fees, territory, the process of renewal or termination, and dispute resolution procedures. Clear and concise language is essential to avoiding disputes with franchisors in the future.
Disputes between franchisors and franchisees are not uncommon and Florida provides various mechanisms for resolution, however, many Franchise Agreements include mandatory mediation or arbitration clauses. These clauses may help resolve disputes more efficiently than litigation, but in some cases litigation may be necessary to protect your rights as a franchisee.
Pros and Cons of Franchising in Florida
Owning a franchise is a great way to own your own business in Florida but the process of opening a franchise can be difficult and daunting. Before you decide to open a franchise in Florida you must do your due diligence and make sure the franchise and the process is the right fit for do your due diligence and make sure the franchise and the process is the right fit for you.
Pros
One of the best things about owning a franchise is that you have an established brand with its own system in place that has been proven to work. This saves you time and money, so you do not have to create your own brand from scratch or develop a system from the ground up.
Since a franchise brand is already established you can leverage things like training, advertising, and the support system the franchise network already has in order to ensure your business’s success and longevity.
Cons
Because you are limited to only established franchises, you will not have as many choices as to what type of businesses you can own or what type of industries you can enter. Some states have additional requirements depending on the type of business you franchise.
Since you would be joining an established brand you may also not have as much say when it comes to things like brand messaging, marketing methods, etc. Similarly, you may also not have as much control over pricing as franchisors have the power to set the prices for your services and products. This can be a problem for prospective franchisees who are used to making marketing decisions or who want control over their band messaging or product and services pricing. Depending on what your goals are in owning a business, these are important factors to consider.
To speak with one of our top Florida franchise lawyers, contact us at coordinator@caklegal.com or 1-877-858-6868.