Franchise Law
Franchise agreements share one defining feature with every other contract that governs a business relationship: the document itself determines who wins if the relationship breaks down.
Ward and Smith has represented franchisors and franchisees in North and South Carolina for decades, guiding clients through every stage of the franchise relationship, from system design through disclosure, sale, renewal, and, when necessary, termination.
Adam Beaudoin and Olivia Lewis prepare FDDs, negotiate franchise agreements, and guide businesses and individuals through the sales and acquisitions of franchise systems. Erica Rogers, a North Carolina Board Certified Trademark Specialist and World Trademark Review 1000 honoree (2024-2026), provides trademark strategy that is essential to franchise and licensing structures built on brand protection. Sean Foerster guides franchisors and franchisees through franchise disputes in litigation contexts.
What We Handle
- Franchise disclosure document (FDD) drafting, review, and compliance under the FTC Franchise Rule, 16 C.F.R. Part 436
- Franchise agreement negotiation and drafting for franchisors and franchisees
- State registration compliance across all states, including North Carolina business opportunity registration under N.C.G.S. § 66-95 for franchisors without a federally registered trademark
- Franchise termination, non-renewal, and transfer disputes
- Franchise system acquisitions and the due diligence involved
- Inadvertent franchisor analysis: determining whether a licensing or distribution arrangement may cross into regulated franchise territory
- Trademark portfolio review, licensing, and enforcement for franchise brands, including the trademark clearance and registration work that underlies every FDD and franchise agreement
- Dispute resolution, arbitration, and litigation for franchise conflicts
Cross-Practice Support
Franchise relationships intersect business law, intellectual property, and employment. Ward and Smith’s practice group draws on attorneys across the firm: IP attorneys when a franchise agreement involves trademark licensing or brand protection; the Business and Tax groups for entity structuring and acquisition transactions; and Litigation when a relationship breaks down and enforcement is needed. That coordination can run through a single firm relationship.
Why Ward and Smith
Ward and Smith attorneys have served as legal advisors to major North Carolina franchisors on their franchise relationships. Olivia Lewis’s and Adam Beaudoin’s experience preparing the full range of franchise documentation for franchisors means clients get counsel that has built these systems from the ground up, not just reviewed them after the fact. A franchise system is a trademark licensing structure as much as it is a set of operating standards, and Erica Rogers’s NC Board Certified Trademark Specialist credential means the mark that anchors the entire system, and every FDD built around it, gets the same scrutiny as the disclosure and agreement drafting itself. For clients evaluating a franchise system acquisition, launching a new franchise offering, or facing a termination dispute, that hands-on experience shapes how agreements are drafted and how disputes are assessed from the first conversation.
Related Practices
We are your established legal network with offices in Asheville, Greenville, New Bern, Raleigh, and Wilmington, NC, and Columbia, SC.
Frequently Asked Questions About Franchising
An FDD is a legally required disclosure document that franchisors must provide to prospective franchisees under the FTC Franchise Rule, 16 C.F.R. Part 436. It must be delivered at least 14 days before any franchise agreement is signed or payment made. The FDD contains 23 required items covering the franchisor’s background, litigation and bankruptcy history, fees and investment estimates, franchisee obligations, restrictions on operations, termination and renewal rights, financial performance representations if provided, and a list of current and former franchisees.
Some states require registration of the FDD before franchises can be sold in that state. North Carolina requires registration as a business opportunity under N.C.G.S. § 66-95 for franchisors without a federally registered trademark.
Ward and Smith drafts FDDs for new and expanding franchisors and reviews them for prospective franchisees.
North Carolina does not have a general franchise registration law. However, under the NC Business Opportunity Sales Act, N.C.G.S. § 66-94 et seq., franchisors that do not license a federally registered trademark in conjunction with their franchise offering must register as a business opportunity with the NC Secretary of State before selling franchises in the state. The registration requires additional FDD disclosures and an annual filing fee. Franchisors with a federally registered trademark are exempt from registration in North Carolina.
Yes, but termination rights are governed by the franchise agreement and may be limited by state law. Most franchise agreements provide for termination for cause after notice and a cure period, and some provide for termination without cause on advance notice. Before terminating, franchisors should review the agreement language, verify the factual basis for termination, confirm applicable state law requirements, and document the termination decision carefully. Franchisees facing termination should seek legal counsel immediately to assess whether the termination was procedurally proper, whether defenses exist, and whether a negotiated exit or transition is available. Poorly executed terminations carry significant litigation risk for franchisors, including claims for wrongful termination and unfair and deceptive trade practices under N.C.G.S. § 75-1.1.
A trademark license grants a third-party permission to use intellectual property within defined parameters, without establishing broader operational control. A franchise agreement also grants IP use rights but additionally establishes detailed operational control over the franchisee’s business, including providing for approved suppliers, required training programs, operating standards, and ongoing support. When a licensor exercises enough operational control over a licensee, the arrangement can cross into regulated franchise territory under the FTC Franchise Rule, requiring an FDD and triggering state registration requirements the licensor may not have anticipated. This inadvertent franchisor risk is a practical compliance issue for North Carolina businesses expanding their brands through licensing arrangements. Ward and Smith advises on structuring these arrangements to achieve the business objectives while avoiding unintended franchise compliance obligations.
Acquiring a franchise system requires reviewing all current franchise agreements and FDDs for consistency, pending litigation, and material deviations from the standard form; assessing the franchisee network’s financial performance, satisfaction, and renewal history; evaluating the trademark portfolio for registrations, disputes, and maintenance status; reviewing operations manuals and training systems for completeness; analyzing any state registration filings and their currency; and assessing pending or threatened claims from franchisees or regulators. IP due diligence is particularly important because the franchise system’s value rests substantially on the trademark portfolio. Ward and Smith coordinates IP, employment, real estate, business, and litigation attorneys on franchise system acquisitions and has experience on both the buyer and seller side.
The 23-item FDD contains significant information, but several items deserve particular attention. Item 19 (financial performance representations) shows what the franchisor is willing to say about actual or projected unit performance, and what it is not willing to say. Item 20 (outlets and franchisee information) reveals how many units have opened, transferred, and closed, and includes contact information for current and former franchisees. Item 21 (financial statements) shows the franchisor’s financial health. Items 8 and 9 cover required and approved suppliers and the purchasing restrictions that follow. Item 12 defines territory rights precisely. The franchise agreement attached as an exhibit, not the FDD summary, contains the enforceable terms. Ward and Smith reviews FDDs for prospective franchisees and identifies provisions that warrant negotiation before signing.
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