Lusthaus Law P.C. - Franchise & Business Law

06/19/2026

If you plan to franchise your business, you need a Franchise Disclosure Document.

The FDD is a federally required document you must provide to prospective franchisees before they invest. It covers 23 items, including your litigation history, fees, estimated investment costs, territory rights and obligations on both sides of the agreement.

A properly prepared FDD protects your system, establishes credibility with serious buyers and keeps you compliant with federal and state franchise laws. An incomplete or inaccurate one can void agreements, trigger regulatory penalties and put everything you have built at risk.

The FDD is not a form to fill out. It is the legal foundation of your franchise.

Lusthaus Law guides franchisors through the preparation of a compliant, credible FDD, helping you build a system designed to last.

Learn more about franchising your business: https://lusthausfranchiselaw.com/services-for-franchisors/franchising-your-business/

06/18/2026

According to Franchise Times, a franchisor in Indiana has been banned from selling franchises; a development that holds important lessons for anyone considering franchise ownership.

I Heart Mac & Cheese left out material litigation in its Franchise Disclosure Document. The state of Indiana found that the franchisor failed to disclose a lawsuit against its CEO, along with other undisclosed lawsuits and executive employment history.

Under the Franchise Rule, franchisors must disclose material information across 23 items in the FDD. What an FDD includes, and what it omits, can determine whether your franchise system holds up to regulatory scrutiny. A document can appear complete and still contain the very gaps that expose your brand to state enforcement action.

That is why franchisors should never file or distribute an FDD without the assistance of experienced franchise counsel who can help ensure an understanding of what information must be disclosed from the beginning. That way, undisclosed litigation, financial details and material facts are captured before the FDD is ever filed or distributed.

Read the full story here: https://www.franchisetimes.com/franchise_news/indiana-bans-i-heart-mac-cheese-from-selling-franchises-in-the-state-voids-existing-agreements/article_7ccb46d9-956b-45ed-bbdc-c56b92669a23.html?utm_source=Special+Delivery&utm_medium=email&utm_campaign=Special+Delivery&utm_id=June+20260616

Contact Lusthaus Law to review your FDD: https://lusthausfranchiselaw.com/services-for-franchisees/franchise-disclosure-documents-review-for-franchises/

I Heart Mac & Cheese is a customizable pasta concept with just six locations left after a peak of about 80. Indiana concluded in a court decision last month that

06/17/2026

Home health care franchises serve a population that values independence and quality care at home.

This sector spans personal care, companion services, skilled nursing support and specialized medical care. Each model carries its own legal and operational profile. The foundation underneath your investment needs to hold.

Franchisees navigate state licensing, Certificates of Need and caregiver employment obligations. Reviewing your FDD, territory protections and unit economics before you sign is essential.

Lusthaus Law guides franchisees through the full process, from FDD review to agreement negotiation and territory evaluation.

Learn more about the Home Health sector: https://lusthausfranchiselaw.com/industries-we-serve/home-health-care/

06/12/2026

Many successful business owners assume that a thriving location automatically means they can scale through franchising. The reality is more nuanced. Franchising is a legal and operational commitment that rewards preparation and frowns upon guesswork.

Before you take that step, ask yourself a few honest questions:
1. Do you have a proven business model? Your concept should already work in the real world, with results that hold up beyond a single location or a single owner.
2. Can your operations be documented and repeated? Franchisees rely on clear systems, training and processes. If your day-to-day runs on instinct rather than structure, that foundation needs strengthening before you franchise.
3. Is your business financially stable? Franchising carries upfront costs, from legal preparation to ongoing support.
4. Is the model truly scalable? Some businesses read well on paper but struggle once removed from their original market.
Scalability means your concept can succeed in new locations, with new operators and in new conditions.

And finally, are you legally ready?

This is where many franchisors underestimate the work involved. Compliance with federal and state franchise laws, a properly prepared Franchise Disclosure Document and sound agreements form a protected, credible system.

Lusthaus Law guides franchisors through these foundational steps with clarity, compliance and confidence, helping you build a system designed to last.

Learn more about franchising your business: https://lusthausfranchiselaw.com/services-for-franchisors/franchising-your-business/

06/11/2026

Selling a franchise is one of the most complex transactions a business owner will face.

Lusthaus Law has guided clients through franchise sales, acquisitions and scaling decisions for many years. Our approach is thorough and responsive, ensuring clients understand each step of the process.

Whether you are preparing to sell, acquiring a new system or working through a complex franchise transaction, Lusthaus Law brings the knowledge and steady counsel you need to move forward with clarity.

Contact Lusthaus Law to learn more about franchise sale support: https://lusthausfranchiselaw.com/contact/

06/09/2026

Updating your is not a one-time task. It is an ongoing legal obligation.

In our latest video, we explain what federal and state franchise sales laws require when it comes to keeping your Franchise Disclosure Document current.

The concept of material change is at the center of these requirements: any new fact, event or development that could reasonably influence a prospective franchisee's purchasing decision. Common examples include leadership changes, new or updated litigation, significant shifts in estimated investment costs and material changes to closures and terminations.
Because of this, federal and state laws call for both routine annual updates and timely amendments whenever something material shifts in your system.

Staying current protects your business and builds confidence with every prospective franchisee.

Learn more by watching our full video: https://lusthausfranchiselaw.com/video-blogs/understanding-the-franchise-disclosure-document-essential-insights-for-franchisors-and-franchisees/

06/05/2026

Building a franchise system the right way starts with the right legal foundation.

We’re excited to announce our new Franchisor Playbook series, which will walk you through the legal blueprint every franchisor needs to launch or scale a successful franchise system.

To kick off this series, we will be addressing five questions every franchisor should know:

- Is my business actually ready to franchise?
- What is a Franchise Disclosure Document and do I need one?
- Can I sell my franchise in any state once I have an FDD?
- What are my obligations once a franchisee signs?
- What happens if a franchisee relationship goes wrong?

Lusthaus Law helps franchisors work through each of these questions with clarity and confidence. From assessing readiness and drafting compliant disclosure documents to managing state registrations and filings. Structuring franchise relationships and protecting your brand as you grow will give you a legal foundation that holds at every stage.

Learn more about protecting your franchise system: https://lusthausfranchiselaw.com/services-for-franchisors/

06/04/2026

Child enrichment and tutoring franchises are built on families who see education as essential, not optional.

This sector spans tutoring, after-school programs, music classes, daycare, youth sports and early education. Each model carries its own operational profile. Whether your system is center-based, hybrid or fully online, the legal structure underneath it needs to hold.

Franchisors in this space face regulatory scrutiny around advertising claims, student outcomes and disclosure expectations. A strong legal framework keeps you compliant while creating room for innovation and growth.

Lusthaus Law advises franchisors on building compliant, scalable systems tailored to the child enrichment and tutoring sector.

Learn more here:
https://lusthausfranchiselaw.com/industries-we-serve/child-enrichment-and-tutoring/

06/03/2026

Royalty fees can shape the financial reality of a franchise relationship.

In our latest blog, we explain why royalties are often misunderstood, especially when the term “gross sales” has a broad definition within the franchise agreement. “Gross sales” may include not only the primary products or services sold but also other revenue streams, which can significantly alter the total royalty payment.

For franchisors and franchisees in restaurant and food retail systems, these details can have a meaningful financial impact over time.

Read our full blog to better understand how royalty provisions are interpreted:
https://lusthausfranchiselaw.com/blog/what-are-gross-sales-for-purposes-of-calculating-restaurant-franchise-royalties/

05/29/2026

When a franchise relationship ends, the agreement often sets out important post-termination duties. These may include de-identification, non-solicitation and the return of confidential materials.

For franchisees, understanding these obligations before signing can help avoid confusion later. For franchisors, clear post-termination terms support consistency and protect the long-term value of the brand.

A franchise agreement should not only address how the relationship begins. It should also explain what happens when it ends.

Contact Lusthaus Law to review your franchise documents: https://lusthausfranchiselaw.com/contact/