Franchising is a popular business model that involves the sale of goods and services through a proprietary system and brand. It is essential for franchisors to be aware of the federal and state laws that regulate the offer and sale of franchises, as these laws are subject to frequent amendments and changes in interpretation. To ensure compliance, many franchisors find it beneficial to consult an attorney who understands the intricacies of Maryland franchise law and registration. Before signing any contract, it is important to have a franchise lawyer review the franchise agreement and negotiate the best terms on your behalf. The franchise agreement is the most important document you must sign just before opening a franchise.
Representation of franchisors and potential franchisors often involves analyzing the proposed business structure to determine whether it creates a franchise under federal law or state law, or if it can be modified to avoid the application of franchise laws. The Securities Division of the Maryland Attorney General's Office is responsible for managing the franchise registry and enforcing franchise laws. This includes preparing a franchise disclosure document (FDD) that complies with the franchise registration and disclosure guidelines developed by the North American Securities Administrators Association. Additionally, before starting any work, Baltimore County must receive and accept an original franchise agreement signed along with a check payable to Baltimore County (Maryland) for the full amount of the associated basic compensation (as shown in Annex C).Franchise law also allows for subfranchising using “area franchises”. An area franchise is a contract in which the franchisor grants a subfranchisor the right to sell franchises on behalf of the franchisor.
It is essential for franchisors to be diligent in carrying out and documenting quality control inspections, as this is necessary for enforcing termination of the franchise agreement if needed. Cahn, director of the franchise law firm, has been recognized as a certified franchise executive by the Institute of Certified Franchise Executives. Many of Maryland's franchise laws are designed to ensure that those who buy franchises have enough information about the agreement they are signing to make an informed decision.
