Even the experienced of attorneys have missed this one. The scenario usually starts out with a business owner who has built a great brand and business model and wants to expand. Knowing that in order to franchise its business, a lot of legal work needs completed with all of the required disclosures required under franchise law.
The solution? It is not to just call it a license. Unfortunately, a name change may not be enough. When granting a license for your business can mix with franchise law when you start adding elements of control. For example, you can use this brand name, but only buy your product from us and use this script when making cold calls. In both federal and state laws, franchise law is not going to be friendly to this kind of setup.
Great care needs to be done by your attorney to review whether you’ll need to comply with franchise laws. Failure to do so can mean heavy penalties.
p.s., not discussed are business opportunities which are in its own separate category as well.