Franchise & Distribution

Hodgson Russ helps clients navigate the complex and evolving U.S. federal and state laws governing franchising and other distribution relationships. We have extensive experience representing franchisors and franchisees as well as related manufacturers, dealers, and distributors. Our goal is to help these clients reach their business objectives while minimizing risk and avoiding costly disputes.

For foreign franchisors and other companies looking to expand into the United States through franchising or contractual distribution relationships, our experienced cross-border attorneys assist with international tax planning, transfer pricing, the Americanization of foreign franchise and other documents, immigration, and other cross-border issues.

Franchise Law

Franchising in the United States requires compliance with a vast range of regulations, including federal and state laws governing pre-sale disclosure and state laws governing franchise registration and the relationship between franchisors and franchisees. Our franchise and distribution team provides counsel to help clients meet these obligations and avoid undue risk.

Our team has experience assisting clients in numerous industries including restaurants, lodging and hospitality, specialty retail, personal care services, home care services, sports camps, after school education, construction products, and financial services.

We assist franchisors with all legal aspects of franchising including:

Determining the appropriate type of franchise activity, including unit franchising, sub franchising, area development, area representative, franchise broker, and other hybrid structures
Preparation and negotiation of all critical documents, including disclosure documents, franchise agreements, and ancillary documents
Franchise registration
New franchisee consultation services
Business opportunity law compliance
Resale price maintenance, exclusivity, refusals to deal, and other antitrust issues
Import and export laws and other supply chain issues
Franchisee recruitment
Use of test stores
Protection of intellectual property
International tax planning and transfer pricing
Real estate purchase and leasing
Food and Drug Administration requirements and other industry-specific regulations
Advertising, social network marketing, and structuring marketing funds
Domestic and international expansion, including mergers and acquisitions

Distribution Law

Because U.S. federal and state franchise laws are worded very broadly, distribution relationships that would not ordinarily be viewed as franchise activities may fall under their regulatory regime. We help manufacturers, distributors, and service providers operate in compliance with these laws and, whenever possible, avoid the need for costly franchise disclosure and registration. Our attorneys also assist clients in matters involving dealer relationship statutes and sales representative laws. Additionally, we advise on industry-specific laws governing distribution relationships, including automobile and recreational vehicle dealerships, petroleum sales, and others.

Many businesses find themselves faced with statutory claims upon the termination of relationships with dealers, distributors, commissioned sales representatives, and similar parties. Our attorneys are experienced in writing contract language and policies to help avoid exposure to such claims. We guide clients through the termination of various business relationships in accordance with applicable laws. We assist clients in taking security over goods sold and in setting up consignment arrangements. Hodgson Russ also provides advice and dispute resolution assistance concerning contract claims, encroachment issues, breach of confidentiality obligations, and non-compete agreements.

Assistance for Franchisees, Dealers, and Distributors

We advise prospective franchisees on potential investment in franchise systems including a consultation to assess your particular needs, review of all appropriate documents and negotiation of changes when necessary, advice regarding due diligence, and legal assistance in termination and other relationship issues.

The knowledge and experience gained by representing both franchisors and franchisees, and by assisting manufacturers as well as dealers and distributors, enhances our ability to serve the legal needs of all our clients — no matter what role their business plays in these relationships.