This assistance can take the form of training, an operating system, marketing, purchasing, on-going advice, a proprietary computer program or other forms of support. Helping the “licensee” develop a marketing plan has been deemed to be substantial assistance.
The courts throughout the U.S. have expanded the definition of a franchise. When given the chance to protect a family who lost their life savings in a “licensing arrangement” with a much larger company, many judges and/or juries will conclude the “license” was really a franchise.
They do so in order to give the family a judgment against the “Franchisor” because it failed to call the business relationship a franchise and give the “Franchisee” the required franchise legal documents, prior to signing the contract.
If this scenario occurs, the “Franchisor” can be hit with a huge judgment.