Franchising offers a proven business model for growth and brand expansion, but both franchisors and franchisees must navigate a complex legal landscape—especially in Pennsylvania. Whether you're launching a franchise system or investing in one, understanding state and federal franchise laws is essential for protecting your interests.

At Aegis Law, LLC, we provide legal assistance to individuals and businesses in Philadelphia who are involved in franchising arrangements. Here are some of the key legal considerations to keep in mind.

Franchise Disclosure Document (FDD) Compliance

Federal law requires franchisors to provide a Franchise Disclosure Document (FDD) at least 14 days before a franchisee signs a contract or pays any fees. While Pennsylvania does not have a separate franchise registration requirement, franchisors must still comply with the Federal Trade Commission (FTC) rules governing FDD content, including financial performance representations and litigation history.

Drafting and Reviewing Franchise Agreements

A franchise agreement defines the legal relationship between franchisor and franchisee. This document governs fees, operational guidelines, use of trademarks, renewal terms, and dispute resolution procedures. A one-size-fits-all contract can be risky. Legal review ensures the terms are fair, enforceable, and compliant with Pennsylvania law.

Business Formation and Licensing

Franchisees must choose the right business structure—such as an LLC or corporation—to limit liability and manage taxes. In addition, local and state licensing, zoning compliance, and health or safety regulations must be met before operations begin.

Employment and Labor Law Compliance

Both parties should be aware of how Pennsylvania labor laws affect hiring practices, employee classification, and wage compliance. Misclassification of employees as independent contractors can lead to serious legal consequences.

Dispute Resolution and Termination

Disputes over territory rights, performance standards, or early termination are not uncommon in franchising. A well-drafted agreement should include clear procedures for mediation, arbitration, or litigation, as well as guidelines for franchise renewal or exit.

Trademarks and Intellectual Property

Franchisors must protect their brand through trademark registration and enforcement. Franchisees, in turn, must adhere to strict guidelines regarding brand usage. Legal guidance helps both parties maintain brand consistency while reducing infringement risk.

How Aegis Law, LLC Can Help

Whether you're considering franchising your business or buying into a franchise system, the attorneys at Aegis Law, LLC are here to guide you through the process. We serve the Philadelphia community with dedicated legal counsel to help you structure agreements, protect your rights, and operate with confidence.