This article is part of a series of book excerpts from The Entrepreneur’s Intellectual Property & Business Handbook, which provides the business, strategy, and legal reference guide for start-ups and small businesses.

 

The FTC Franchise Rule is not the only law regulating franchise relationships. Many states also have versions of disclosure laws or laws requiring fair dealing. The states with fair dealing regulations enforce state-based legal obligations on the franchisor that cannot be modified by the contractual terms. The intersection of federal law with the array of state regulations make the issuance of a franchise complex. A company should not develop a franchise system without the assistance of legal and accounting counsel experienced in the field.