As a lawyer exclusively representing franchisees, the types of claims that I see are numerous and varied. Anything from a franchisor’s failure to approve a transfer, to a threatened termination, to failure to support the franchise in a way the franchisee is expecting (which happens a lot)—the calls I receive keep my job interesting. However, the call that I and my colleagues get most frequently relates to fraud; someone somewhere oversold the franchise opportunity, typically in multiple ways.

Unlike the sale of a typical business, someone who is selling a franchise is really selling the use of a trademark and particularized systems. Finding the location, building the unit, and operating the business are all left up to the franchisee. Because the franchisee bears nearly the entirety of the financial risk, government regulation, at both the state and federal level, focuses primarily on attempting to prevent fraud in the sale of franchises by requiring robust disclosure of the franchise opportunity.