According to federal laws, a franchise has three elements:

What is a franchise?

1. The use of a common trade name or trademark
2. The payment of a fee
3. The rendering of “substantial” assistance.

Thousands of companies in the U.S. have successfully franchised their businesses.

Therefore, the courts and federal laws have a tendency to find anything which has these three elements a franchise – regardless of what the company calls the program, be it a license, partnership, association, distributorship, co-operative, joint venture or limited partnership.

Contact one of our franchise consultants for more information today at (706) 356-5637!

It can be as little as a one-time $500 payment, or “indirect” franchise fee payments, such as the profits derived from the sale of product or services to a “licensee”.

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.