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What are misrepresentations under Florida franchise law?

On Behalf of | Jan 25, 2023 | Franchising |

Businesses looking to expand to Florida or who already have a foothold in Florida and want to increase their presence may consider franchising. People who want to start a business but do not want to do it from the ground floor may also think about the benefits of franchising.

This can be beneficial for both sides. Franchises have a system and a recognizable brand. Still, it does not mean that it is an automatic success or obstacles will not arise along the way. There are laws that regulate franchising and people need to be aware of them beforehand. When problems arise, it is imperative to know how they can be solved. One such challenge is if there are allegations of misrepresentations.

Understanding the law for franchise misrepresentations

In Florida, a franchise agreement has certain legal requirements that must be followed. There will be a contract or agreement between at least two people. It can be written or oral, expressed or implied. Franchisors give franchisees the right to sell goods or services that it has manufactured, crafted or created. The franchisee is an independent part of the business. They will use the franchisor-provided supplies and adhere to their method of operations.

Legal disagreements can arise if misrepresentations are alleged to have occurred. For example, if the opportunity for success from purchasing the franchise is intentionally overblown, it can be construed as misrepresentation. Failing to disclose all of the necessary investment capital is also misrepresentation.

In some cases, there could be a failure to disclose the franchisors’ attempts to create or sell more franchises than would be feasible for the market. This is misrepresentation. An example might be selling several coffee franchises in a narrow area as this would likely inhibit sales at all of them.

To address franchise disputes, having professional representation can help

These behaviors are illegal and can result in criminal charges. In addition, it can be problematic for the franchisee as they try to make their prospective business a success. From the start, people need to understand the laws and rules for franchising.

When issues come up, it is even more critical to have guidance. Contacting legal professionals who focus on business law and understand franchising can be helpful in dealing with any matters that come up from the start.