Legal Considerations for Franchise Owners in Florida

 Posted on March 21, 2024 in Business Law

Navigating the state's complex laws is crucial for your business's success and longevity. From complying with state-specific regulations to resolving disputes with franchisors, understanding your legal rights and obligations is important. A Florida lawyer is beneficial to have on your side for legal considerations.

Franchise Disclosure and Registration

Florida has stringent laws governing the state's offer and sale of franchises. The Florida Franchise Act requires a franchisor to register their franchise offerings with the Florida Department of Agriculture and Consumer Services before offering or selling franchises in Florida. Franchisors must also provide prospective franchisees with a comprehensive Franchise Disclosure Document (FDD) within 14 calendar days before signing any binding agreement or making any payment.

As a franchisee, carefully reviewing the FDD is critical, as it contains essential information about the franchisor's business, the terms of the franchise agreement, and any past or pending litigation involving the franchise system.

Franchise Relationship Laws

The franchise relationship in Florida is governed by the Florida Franchise Act, which aims to prevent unfair practices and protect franchisees from potential abuses by franchisors. The Act prohibits certain actions by franchisors, such as terminating or refusing to renew a franchise agreement without reasonable cause or imposing unreasonable restrictions on the transfer of a franchise.

Franchisees should familiarize themselves with their rights under the Act and seek legal counsel if they believe their franchisor has violated these provisions.

Non-Compete and Non-Solicitation Agreements

Many franchise agreements in Florida include non-compete and non-solicitation clauses restricting a franchisee's ability to engage in competing business activities or solicit employees or customers after the franchise relationship ends. However, Florida has specific laws that limit the enforceability of these clauses.

Non-compete agreements must be reasonable in geographic scope and duration and serve a legitimate business interest. Non-solicitation agreements are generally more enforceable but should still be carefully reviewed to ensure they comply with Florida law.

Lease Agreements and Real Estate Considerations

For many franchise owners, securing a suitable location for their business is a critical step. Florida has specific laws governing commercial leases, including provisions related to security deposits, maintenance responsibilities, and lease termination.

Franchisees should carefully review their lease agreements and consult with an experienced real estate attorney to ensure they understand their rights and obligations as tenants.

Dispute Resolution and Litigation

Disputes between franchisors and franchisees are not uncommon, and Florida provides various mechanisms for resolving these conflicts. Many franchise agreements include mandatory arbitration or mediation clauses, which can help resolve disputes more efficiently and cost-effectively than traditional litigation.

However, in some cases, litigation may be necessary to protect your rights as a franchisee. Florida's court system has specific procedures and requirements for franchise-related lawsuits, and it is essential to work with an attorney to navigate these challenges successfully.

Contact a Broward County, FL Business Lawyer

Owning and operating a franchise in Florida comes with unique legal considerations and challenges. By understanding your rights and obligations under Florida law and seeking guidance from an Oakland Park, FL business attorney, you can better protect your business interests and navigate the complexities of the franchise relationship. Elliot Law Group practices international business law and is also a licensed solicitor in both England and Wales. Call The Elliot Legal Group, P.A. at 754-332-2101 for a private consultation.