Overview
What We Do
With Harold Kestenbaum — named among the top 100 franchise lawyers in North America by Franchise Times and focused exclusively on franchise law since 1977 — as Of Counsel, Shah Grossi's franchise practice is among the most experienced available.
Schedule a Consultation →Services Include
- —Franchise Disclosure Document (FDD) preparation
- —State franchise registration filings
- —Franchise agreement drafting & negotiation
- —Area development & multi-unit agreements
- —Franchisee compliance programs
- —Franchise renewal & termination
- —Distribution agreement structuring
- —International franchise & licensing
Common Scenarios
Problems We Solve
- 01
An FDD has not been meaningfully updated in 12+ months, and state registration examiners push approval timelines out by 60 to 90 days responding to stale financial and franchisee-contact data.
How we help: Franchise Systems · Expansion & Growth
- 02
A franchisor relies on a generic exemption (fractional, large franchisee, sophisticated franchisee) without a documented legal analysis — and a later franchisee rescission claim exposes the reliance as unsupported.
How we help: Risk & Compliance
- 03
Multi-unit and area development agreements are adapted from single-unit templates, leaving cross-default, transfer, and development-schedule terms ambiguous in ways that surface in the first dispute.
How we help: Contracts practice
- 04
International expansion proceeds through a master franchise arrangement without consideration of foreign franchise disclosure, consumer-protection, or tax rules — exposing the franchisor to foreign regulatory claims.
How we help: International Business
- 05
A franchise is terminated or non-renewed without strict compliance with notice, cure, and post-term covenant procedures — and the franchisee successfully challenges the termination in litigation or arbitration.
How we help: Dispute Resolution
Common Questions
Frequently Asked
Q.What is a Franchise Disclosure Document and when do I need one?
An FDD is a legally required disclosure document under the FTC Franchise Rule that a prospective franchisee must receive at least 14 calendar days before signing any agreement or paying any money. It contains 23 disclosure items covering fees, territory, obligations, litigation history, financial performance representations, and contact information for existing franchisees. Any offer or sale of a franchise without a compliant FDD is unlawful. The FDD is the foundation of every franchise offering and must be updated annually.
Q.In which states must I register my franchise?
Thirteen states currently require franchise registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin (through its notice-filing regime). Registration approval must be obtained before offering or selling to residents of those states. Several additional states require notice filings. We manage registration in all registration states, track comment letters from examiners, and coordinate renewal cycles.
Related: Franchise Systems
Q.Do I need to include Item 19 financial performance representations?
Item 19 is technically optional, but its absence has become unusual. Franchisees and franchise brokers expect it, and franchisors without an Item 19 are at a competitive disadvantage in franchisee recruitment. When included, Item 19 must have a reasonable factual basis, be presented in a manner that does not mislead, and satisfy SEC-like standards for substantiation. We draft Item 19 representations based on defensible data and clear disclosure of the basis and assumptions.
Q.What is the difference between a master franchise, an area developer, and a multi-unit franchisee?
A master franchisee receives the right to sub-franchise within a defined territory — essentially operating as a sub-franchisor. An area developer receives the right to develop multiple units within a territory on a set schedule but does not sub-franchise. A multi-unit franchisee owns and operates multiple units directly without territorial development obligations. These structures have very different economics, control profiles, and legal requirements. The right structure depends on the franchisor's growth strategy and the franchisee's operational capability.
Related: Expansion & Growth
Q.How do franchise termination and non-renewal actually work?
The franchise agreement governs termination and non-renewal procedurally, but state franchise relationship laws (in states that have them) layer on additional notice, cause, and cure requirements. California, for example, has specific good-cause and notice standards. A termination effected without strict compliance with both the agreement's procedures and applicable statutory requirements is often reversible — and the remedy can include reinstatement, damages, or an injunction. Post-termination covenants (non-compete, non-solicit) are scrutinized and must be narrowly drafted.
Q.Can I franchise internationally?
Yes, but each country has its own franchise disclosure, registration, consumer-protection, tax, and IP regime. A master franchise or area development arrangement is the most common structure for international expansion. Key considerations include local franchise disclosure laws (in countries that have them), currency and tax treatment of fees, enforceability of post-termination restrictions, trademark registration in the target jurisdiction, and applicable-law and dispute-resolution provisions. International expansion without a structured legal plan typically creates enforcement problems that are expensive to fix later.
Related: International Business industry
Related Practice Areas
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