Overview
The Landscape
With Harold Kestenbaum — one of North America's top franchise lawyers, focused exclusively on franchise law since 1977 — as Of Counsel, Shah Grossi's franchise practice is among the most experienced available anywhere. We work with emerging and established franchisors across industries, helping them build legally sound systems that grow.
Key Legal Challenges
- —Preparing FDDs that meet federal and state disclosure requirements
- —Registering in the 13 states that require franchise registration
- —Drafting franchise agreements that protect the system while attracting strong franchisees
- —Managing franchisee compliance, renewals, and terminations
- —Expanding internationally through master franchise and licensing arrangements
Common Scenarios
Problems We Solve
- 01
An FDD has not been meaningfully updated in 12+ months, and state examiners push approval timelines out 60 to 90 days responding to stale financial performance data and outdated franchisee contact information.
How we help: Franchise Expansion article · Franchise & Distribution
- 02
A franchisor relies on informal agreements or license-only arrangements that actually meet the FTC's franchise definition — exposing the business to rescission claims from every licensee.
How we help: Risk & Compliance
- 03
Multi-unit and area-development deals are adapted from single-unit templates, creating ambiguity in cross-default, transfer, and development-schedule terms that surfaces in the first dispute.
How we help: Franchise & Distribution · Contracts
- 04
International expansion proceeds through master franchise arrangements without consideration of foreign disclosure, consumer-protection, or tax regimes — creating enforcement and liability exposure abroad.
How we help: International Business
Our Work
How We Help
FDD preparation and annual updates
State franchise registration in all registration states
Franchise agreement drafting and negotiation
Area development and multi-unit agreements
Franchisee compliance programs and operations manuals
International franchise expansion and licensing
Legal Services
Related Practice Areas
Common Questions
Frequently Asked
Q.When do I need an FDD?
Before offering or selling any franchise. The FTC Franchise Rule requires a prospective franchisee to receive the FDD at least 14 calendar days before signing any agreement or paying any money. Operating without a compliant FDD is unlawful regardless of how the arrangement is characterized. The FDD must be updated annually, and failing to update it is one of the most common compliance failures we see in emerging franchise systems.
Related: Franchise & Distribution
Q.Which states require franchise registration?
Thirteen states currently require registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, and Washington (Wisconsin requires notice filings). Approval must be obtained before offering or selling to residents of those states. Additional states require notice filings. Registration comment letters have grown longer and more detailed in recent years, and approval timelines have stretched.
Q.Should I include financial performance representations (Item 19)?
Item 19 is technically optional, but its absence has become unusual. Franchisees and franchise brokers expect it, and franchisors without one are at a recruiting disadvantage. Included representations must have a reasonable factual basis, avoid misleading presentation, and satisfy substantiation standards. We draft Item 19 representations based on defensible data with clear disclosure of the basis and assumptions, so the representation supports sales without creating liability.
Q.What is the difference between a master franchise, area developer, and multi-unit franchisee?
A master franchisee sub-franchises within a territory, functioning as a sub-franchisor. An area developer develops multiple units on a set schedule but does not sub-franchise. A multi-unit franchisee owns and operates multiple units directly without development obligations. These structures have very different control, economics, and legal profiles — the right choice depends on the franchisor's growth strategy and the franchisee's operational capacity.
Q.How do I protect the franchise system's brand across all locations?
Federal trademark registration of the marks used in the system, trade-dress protection for distinctive visual elements, rigorous brand-standards enforcement in the operations manual, and tight quality-control provisions in the franchise agreement. The franchisor's right to audit, inspect, and enforce standards must be both contractual and actively exercised — unexercised rights can erode trademark protection over time and create systemic quality control issues.
Related: Intellectual Property
Ready to Discuss
Your Franchise Matter?
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