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Understanding the Florida Franchise Misrepresentation Act

On Behalf of | Dec 2, 2022 | Franchising |

The Florida Franchise Misrepresentation Act is a legislative statute that provides protection to any person who invests in a franchise within the state of Florida. It is in place to hold a franchisor accountable for misrepresentations made to a franchisee.

Though it was a criminal statute in 1971 when first enacted, the act is now a private civil action. It can be found in Florida Statutes Section 817.416.

What qualifies as franchise misrepresentation?

A franchisor may sue a franchisee when one or more of the following take place:

  • A franchisor fails to disclose or misrepresents the total investment required from a franchisee;
  • A franchisor misrepresents the opportunity or prospect for success of a franchisee;
  • A franchisor sells more franchises than a market can reasonably sustain.

The Florida Franchise Misrepresentation Act does not apply to franchisees that are located outside of the state, even if the franchise is headquartered in Florida. However, it does cover franchisees who open within the state if their headquarters are outside the state.

In other words, if the franchise operates as a Florida business, inside the state, it is covered.

The plaintiff in a lawsuit filed under the Florida Franchise Misrepresentation Act is entitled to a return of all money invested in the franchise, costs incurred in filing the lawsuit, and reasonable attorney’s fees.

An experienced business law attorney can assist business leaders in assessing how the law may apply to the facts of their situations.