A franchise is an agreement or contract between two or more persons by which the franchisor, for a fee, gives the franchisee the right to engage in the business of offering or distributing goods or services using the franchisor’s trade name, trademark, service mark, logotype, advertising, or other commercial symbol. Both the franchisor and the franchisee must have a community of interest in the marketing of the goods or services.
Franchising is a method of distributing and marketing goods or services. It is not a separate form of business organization. The franchisor’s business and the franchisee’s business each will take one of the forms of organization previously discussed.
Franchises are regulated in Minnesota by the Department of Commerce, and anyone contemplating the sale of a franchise should check with that office for registration and filing requirements and exemptions that may apply. Regulatory requirements applicable to franchises will be discussed in a future post.
The next several posts will cover:
- Filing franchise documents with the Secretary of State
- Franchise regulatory considerations
- Franchise registration
If you are considering buying or starting a franchise in Minnesota, consider reviewing these tips on buying a franchise in Minnesota.
Our franchise attorneys have represented a number of franchisees in franchise agreement disputes with large health club franchisors including Anytime Fitness, Snap Fitness, and Planet Fitness. If you have legal questions involving your franchise agreement, you are welcome to contact our firm.
CREDITS: This is an excerpt from A Guide to Starting a Business in Minnesota, provided by the Minnesota Department of Employment and Economic Development, Small Business Assistance Office, Twenty-eighth Edition, January 2010, written by Charles A. Schaffer, Madeline Harris, and Mark Simmer. Copies are available without charge from the Minnesota Department of Employment and Economic Development, Small Business Assistance Office.