You’ve found a franchise that seems like the perfect fit: a well-known brand, proven business model, and the support of an established company. It feels like a shortcut to business ownership. But before you sign anything, there are serious legal questions to consider.
Franchising can be a smart way to enter the market in Fairfax County, but it’s not without risk. Working with an experienced business law attorney is the best way to position your franchise for long-term success.
What’s in a Franchise Agreement?
The franchise agreement is the contract that defines your relationship with the franchisor. Once signed, it’s legally binding and often challenging to change, so it pays to review it carefully.
- Your right to use the franchisor’s name, trademarks, and system
- The fees you’re required to pay, including initial fees and ongoing royalties
- Your responsibilities, such as operating standards, marketing requirements, and reporting obligations
- The duration of the agreement and any renewal options
- Whether you’ll have an exclusive territory or be competing with other franchisees nearby
While many agreements are non-negotiable, some terms may be clarified or adjusted with the right legal help. Even if nothing changes on paper, a lawyer can help you fully understand the risks before you commit.
What Is the Franchise Disclosure Document (FDD)?
Before you sign the franchise agreement, the franchisor is required by federal law to provide you with a Franchise Disclosure Document, or FDD. This document includes detailed information about the franchise system and is designed to help you make an informed decision.
The FDD includes:
- Background on the company and its executives
- Litigation history and bankruptcy filings
- Initial investment and ongoing costs
- Restrictions on goods, services, and suppliers
- Financial performance representations (if offered)
By law, the FDD must be provided at least 14 days before you sign anything. This gives you time to review it, and you should. Many franchisees skip this step or rely on the franchisor’s word. That can lead to unpleasant surprises down the road.
Fairfax County and Virginia Business Requirements
In addition to federal regulations, starting a franchise in Fairfax County means complying with state and local laws. You’ll likely need to:
- Register your business entity with the Virginia State Corporation Commission (SCC)
- Obtain a local business license from Fairfax County
- Comply with zoning regulations for your chosen location
- File and pay Virginia business taxes, including sales tax
- Pay the Business, Professional, and Occupational License (BPOL) tax if required
If your franchise operates in a regulated industry (e.g., food service, child care, or health service), you may need additional permits and inspections. These requirements vary by locality, so it’s essential to get guidance early in the process.
Avoiding Legal Pitfalls
Too often, franchisees get caught off guard by terms they didn’t fully understand. Here are some common issues to watch for:
- Overlooking long-term fees or exit penalties
- Not realizing how much control the franchisor maintains over pricing, marketing, or operations
- Signing a commercial lease without understanding your liability if the franchise fails
- Underestimating personal guarantees or non-compete clauses
While the excitement of owning a business can make it tempting to move quickly, a careful legal review can help you avoid expensive mistakes.
How a Business Attorney Can Help
Starting a franchise is a big commitment, so having informed legal representation is a wise choice. An experienced attorney can help you:
- Review the franchise agreement and disclosure document
- Advise on forming a legal entity to protect your personal assets
- Ensure compliance with Fairfax County regulations
- Negotiate lease terms or other related contracts
- Identify risks and help you plan for long-term stability
At Surovell, Isaacs & Levy, we help business owners in Fairfax County protect what they’re building. Our goal is to make sure your foundation is solid before you invest your time and money.
Let’s Talk Before You Sign
Franchises can offer great opportunities, but they come with obligations that aren’t always obvious. If you’re considering a franchise in Fairfax or anywhere in Northern Virginia, we’re here to help. Contact Surovell, Isaacs & Levy today to schedule a consultation.
Posted in: Business Law