Owning a business can be one of the most rewarding decisions you will ever make, but it also comes with legal and financial risks. Buying, selling, or running a franchise adds an extra layer of complexity because franchisees generally must operate under strict franchise system standards and comply with detailed agreements. At the Kumar Law Firm PLLC, we help business owners in Austin and throughout Texas understand the material aspects of their franchise deal, enabling them to make informed and confident decisions.
We guide clients through the entire franchising process, from reviewing Franchise Disclosure Documents (FDDs) to advising on navigating disputes with franchisors. Our goal is simple: protect your investment, minimize risk, and help your business grow within the framework of the franchise system.
Understanding Franchise Law in Texas
Franchise law regulates how franchisors and franchisees do business together. It governs everything from the initial sale of a franchise to its operation, renewal, or transfer. Both federal and state laws may apply, including the Federal Trade Commission’s Franchise Rule, which requires franchisors to disclose key information to potential franchisees.
We help clients understand how these laws apply to their situation, including:
- The information required in the Franchise Disclosure Document (FDD)
- Any franchise compliance requirements in Texas
- Common contractual obligations and franchise fees
- Rights and remedies if a party breaches the agreement
Understanding these rules early helps prevent problems later, especially when it comes to compliance, renewals, and operational control.
Buying a Franchise
Purchasing a franchise may offer the advantage of an established brand and business model, but it is still a significant commitment. The FDD is your first window into how the business operates. It covers financials, litigation history, fees, and performance representations.
Often, once you are approved by the franchisor, you will sign a Franchise Agreement, a legally binding contract that defines your rights and responsibilities. It typically outlines royalties, operational standards, marketing rules, and termination clauses. We review and, when appropriate, help clients negotiate these agreements to ensure that their interests are represented and their investment is protected.
Before an individual signs, our attorneys generally:
- Review the FDD and/or Franchise Agreement for accuracy and hidden risks
- Explain the meaning and practical implications of the agreement, including your ongoing obligations
- Evaluate whether the franchise aligns with your business goals
- Identify terms that may be negotiable, out of the ordinary, or that require clarification
Selling or Transferring a Franchise
When it’s time to move on from your business, selling or transferring your franchise can present challenges. Most Franchise Agreements require written consent from the franchisor and strict compliance with the brand’s procedures.
We assist franchisees in preparing for a successful sale by ensuring they meet all transfer requirements, which often include:
- Payment of transfer fees
- Culling of lists of assets, such as vendor agreements and inventory lists
- Franchisor approval of the new owner
- Completion of required training by the buyer
- Renovations or updates to meet brand standards
Selling or transferring a franchise can be a complex process requiring a carefully crafted agreement that complies with franchisor requirements and protects the parties’ respective interests. Our team can help to draft such agreements and manage the process to avoid delays, reduce liability, and protect the value of your business.
Maintaining Franchise Relationships and Resolving Disputes
After the sale or purchase is complete, the relationship between the franchisor and the new franchisee continues. The franchisor typically sets rules for marketing, product sourcing, operations, and branding. These requirements are designed to protect the brand but can sometimes lead to disputes.
We advise clients on a variety of franchise-related matters, including:
- Renewal and non-renewal disputes
- Alleged contract breaches or default notices
- Royalty or fee disagreements
- Restrictions on territory or product sourcing
- Advertising and brand compliance issues
Whether through apprising clients of their options to help them make an informed decision or advising clients on how to approach negotiation with their franchisor, we focus on resolving disputes efficiently so clients can return to running their business.
Why Choose the Kumar Law Firm PLLC
Franchising offers tremendous potential, but success depends on making informed choices at every step, especially at the beginning. Our firm combines legal insight with real-world business experience to help you assess opportunities, avoid common pitfalls, and plan for long-term growth. We understand what’s at stake — your time, money, and reputation — and we work to protect them.
We also advise clients on related business matters, including entity formation, lease agreements, and commercial contracts, providing continuity and peace of mind for every stage of ownership.
Contact an Experienced Austin Franchise Law Attorney
Whether you are reviewing an FDD, preparing to sell or buy a franchise, or managing an ongoing dispute, our team can endeavor to help you move forward with clarity and confidence. At the Kumar Law Firm PLLC, we provide practical, business-minded legal guidance to first-time franchise purchasers and established owners in Austin and across Texas.Let’s discuss how we can help you protect your investment and strengthen your franchise business. Contact us today to schedule a consultation.