Lusthaus Law P.C. - Franchise & Business Law

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This week's "Franchisor Playbook" turns to a question that shapes many growth plans. Can I sell franchises in multiple s...
09/11/2026

This week's "Franchisor Playbook" turns to a question that shapes many growth plans. Can I sell franchises in multiple states at once?

Several states require registration or filing before you offer or sell within their borders, and the specific obligations vary from one to the next. Understanding these differences matters, because planning your multi-state strategy in advance keeps your expansion compliant and on schedule.

Considerations for franchisors interested in multi-state expansion:

- Registration States: Certain states require you to register your Franchise Disclosure Document before you offer or sell there. Filing early and understanding each state's timeline helps you avoid delays.
- Varying State Requirements: Requirements differ across jurisdictions, from filing fees to review periods to specific disclosure obligations.
- Coordinated Expansion Planning: A thoughtful, state-by-state strategy keeps your timeline realistic and your compliance intact.

Selling across multiple states is entirely achievable when you plan ahead and account for each jurisdiction's rules. A clear, proactive strategy is what keeps your expansion both compliant and on track.

Lusthaus Law helps franchisors navigate multi-state requirements and build a compliant foundation for growth.

Learn more about legal franchise support: https://lusthausfranchiselaw.com/services-for-franchisors/

This week's "Myth or Fact" addresses a common misconception: franchisees are fully independent business owners.Franchise...
09/10/2026

This week's "Myth or Fact" addresses a common misconception: franchisees are fully independent business owners.

Franchisees operate their own businesses, but must follow the system’s standards and obligations. This dynamic creates legal responsibilities for both sides and potential liability for franchisors.

Understand the difference between independence and obligation in a franchise agreement:

- Brand Standards and Control: Franchisees must meet your operational and brand requirements, but excessive control may increase legal risk.
- Shared Legal Responsibilities: Both parties have obligations under the franchise agreement. Franchisee actions, such as employment practices or customer disputes, can lead to liability for franchisors if independence is unclear.
- Clear Boundaries: Well-defined roles, responsibilities and boundaries clarify the relationship, ensuring franchisees run their own businesses while staying accountable to your system.

Lusthaus Law helps franchisors define these relationships with clear legal structure built to protect the brand at every stage.

Learn more about legal franchise support: https://lusthausfranchiselaw.com/services-for-franchisors/

This week's "Franchisors Throughout History" series turns to A&W Root Beer, one of the earliest food and beverage franch...
09/09/2026

This week's "Franchisors Throughout History" series turns to A&W Root Beer, one of the earliest food and beverage franchise systems in the United States.

In the 1920s, A&W began franchising its root beer stands across the country. Operators licensed the A&W name and its signature recipe while running their own independent stands. It was a bold idea at a time when most brands grew only through company-owned locations.

That model proved a trusted brand could scale rapidly through independent owners, not just through corporate expansion.

Franchising means turning a successful business into a system others can reproduce, with the standards, structure and consistency that keep a brand strong across every location. A sound legal foundation is what makes that process seamless.

Contact Lusthaus Law to learn about franchising your food and beverage business: https://lusthausfranchiselaw.com/industries-we-serve/restaurants-and-food-retail/

This week's "Franchisor Playbook" turns to a question that catches many franchisors by surprise. What counts as an "offe...
09/04/2026

This week's "Franchisor Playbook" turns to a question that catches many franchisors by surprise. What counts as an "offer to sell" a franchise?

An offer to sell can happen far earlier than most franchisors expect. Advertising an opportunity, discussing terms or simply soliciting interest may all qualify under franchise laws. Understanding where this line falls matters, because certain offers trigger disclosure and registration obligations before you ever sign an agreement.

Situations that may qualify as an offer to sell:

- Advertising the Opportunity: Promoting your franchise through websites, social media or trade shows can constitute an offer. Even general messaging that invites prospective franchisees to inquire may fall within the scope of franchise laws.
- Discussing Terms: Conversations about fees, territory or investment amounts can move a casual exchange into regulated territory. Once you begin outlining specifics, you may be making an offer in the eyes of the law.
- Soliciting Interest: Reaching out to potential candidates or encouraging them to apply can qualify, even when no formal paperwork has changed hands.

Once an offer occurs, federal and state requirements may apply. Providing a Franchise Disclosure Document at the right time, and registering where required, keeps you compliant and protects the integrity of your system.

Lusthaus Law helps franchisors understand their obligations and build a compliant foundation for growth.

Learn more about legal franchise support: https://lusthausfranchiselaw.com/services-for-franchisors/

Welcome to our new "Myth or Fact" series, where we examine the assumptions that shape franchise decisions.This week's my...
09/03/2026

Welcome to our new "Myth or Fact" series, where we examine the assumptions that shape franchise decisions.

This week's myth: every franchise is a proven path to success.

The reality is that a recognizable brand does not guarantee a profitable investment. Name recognition can open doors, but it does not promise strong returns. Success depends far less on the logo and far more on the fundamentals behind it.

What actually determines whether a franchise succeeds:

- Unit Economics: Study the initial investment, ongoing fees, profit margins and the revenue individual locations realistically generate. A brand can be popular and still leave franchisees with thin margins.
- Territory Strength: Location and market matter. Evaluate the demand in your area, the level of competition and the protections your agreement provides against encroachment.
- Franchisor Support Quality: Assess the training, marketing and operational guidance the franchisor delivers. Reliable, consistent support helps you open smoothly and grow with confidence.

A franchise is only as strong as the fundamentals beneath the brand.

Lusthaus Law helps franchisees evaluate opportunities, review disclosures and protect their investment at every stage.

Learn more about how we support franchisees: https://lusthausfranchiselaw.com/services-for-franchisees/

Franchise fees extend well beyond the initial payment. The Franchise Disclosure Document (FDD) identifies financial obli...
09/01/2026

Franchise fees extend well beyond the initial payment. The Franchise Disclosure Document (FDD) identifies financial obligations you may carry as a franchisee.

Carefully review these three items before you commit:

- Initial Investment (Items 5 and 7): The initial franchise fee covers services such as site selection, training and launch support. However, Item 7 reveals the true cost of opening, including real estate, construction, equipment, inventory and technology.
- Royalties (Item 6): These recurring payments, typically a percentage of gross revenue, continue regardless of how your location performs. Minimum royalty provisions mean you may owe payment even during slow periods or an early opening phase.
- Advertising and Ongoing Fees: Marketing contributions are separate from royalties and do not guarantee customer traffic at your location. Item 6 also identifies technology charges, renewal fees, transfer fees and other recurring obligations that affect your long-term margins.

Lusthaus Law helps franchisees understand their full financial obligations before signing.

Read our latest blog for the full breakdown: https://lusthausfranchiselaw.com/blog/key-details-to-know-about-franchise-fees/

Your operations manual is a living document, and your ability to update it may be the difference between a system that e...
08/28/2026

Your operations manual is a living document, and your ability to update it may be the difference between a system that evolves and one that stalls.

This week's "Franchisor Playbook" turns to a question that shapes how your brand grows over time: can I change my operations manual after franchisees sign?

In most cases, yes. Franchise agreements typically allow updates to the operations manual, so your system can improve as markets, technology and customer expectations shift. The key is staying within the scope of your agreement and keeping each change reasonable.

Considerations worth applying before you update:

- Scope of Changes: Confirm that your franchise agreement grants the right to modify the operations manual.
- Reasonableness Standard: Updates should be reasonable and serve a legitimate business purpose. Changes that impose significant new costs or fundamentally alter the bargain may invite challenge, so weigh each revision against what your franchisees originally agreed to.
- Communication: Notify franchisees of updates in a clear and timely manner. Transparent communication supports compliance and reinforces trust across your system.
- Documentation: Organized documentation shows that your changes were purposeful, reasonable and within the scope of your agreement.

A thoughtful approach to updates keeps your system current while protecting the integrity of your agreements. Clear, well-drafted terms allow you to improve with confidence and demonstrate that every change rests on solid, defensible ground.

Learn more about legal franchise support: https://lusthausfranchiselaw.com/services-for-franchisors/

Retail franchising offers a compelling path to business ownership. You gain access to an established brand, a proven mod...
08/27/2026

Retail franchising offers a compelling path to business ownership. You gain access to an established brand, a proven model and a customer base that already knows your name.

The opportunity is only as strong as the legal foundation beneath it. Every retail franchise agreement comes with obligations, restrictions and terms that define what you can do, where you can operate and how your business can grow over time. Understanding what you are committing to before you sign is one of the most important steps you can take.

Lusthaus Law helps retail franchisees evaluate their agreements, understand their rights and move forward with clarity at every stage of the process.

Learn more about the retail franchise industry: https://lusthausfranchiselaw.com/industries-we-serve/retail/

Area development may be your fastest path to a multi-unit portfolio.Experienced franchisees who succeed with one locatio...
08/25/2026

Area development may be your fastest path to a multi-unit portfolio.

Experienced franchisees who succeed with one location often want to expand. An area development agreement grants the right to open multiple units within a defined territory, opening the door to concentrated growth and lasting enterprise value.

Here is what makes this structure worth considering:

- Exclusive territory: Area developers are typically the first and only operator in their market during the development period, locking in favorable conditions.
- Economies of scale: Multiple locations lower per-unit costs through better supplier terms, shared staff and streamlined back-office operations.
- Territory protection: Development agreements often prevent other franchisees from opening units in your area while you build, giving you room to launch without encroachment.
- Cross-default protection: A broadly drafted cross-default clause can put your entire portfolio at risk. These provisions are often negotiable, with carve-outs and cure periods that keep one setback from threatening every unit.

Experienced franchise counsel can review your documents, standardize new agreements and protect your interests at every step.

Read the full breakdown of area development agreements: https://lusthausfranchiselaw.com/blog/is-an-area-development-agreement-right-for-you/

We are honored to share that Julie Lusthaus has been recognized in the 2027 edition of The Best Lawyers in America® for ...
08/24/2026

We are honored to share that Julie Lusthaus has been recognized in the 2027 edition of The Best Lawyers in America® for her work in Franchise Law.

Best Lawyers curates one of the largest peer-reviewed recognition processes in the legal profession. Inclusion is based on evaluations from other attorneys who understand the work firsthand, which makes this acknowledgment especially meaningful.

Whether you are signing your first franchise agreement, or scaling an established brand, you deserve legal guidance you can trust.

Thank you to the clients, colleagues and friends who continue to make this industry so rewarding.

Learn more about Lusthaus Law: https://lusthausfranchiselaw.com/about/

Address

222 Bloomingdale Road Suite 202
White Plains, NY
10605

Opening Hours

Monday 8am - 5pm
Tuesday 8am - 5pm
Wednesday 8am - 5pm
Thursday 8am - 5pm
Friday 8am - 5pm

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+19142654100

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