What You Need to Know About Franchising
Whether you are starting a new franchise or buying or selling an existing franchise, it is a good idea to keep an eye on state legislature for any proposed legislation that may affect franchise operations.
In Pennsylvania, there is an important house bill under review that, if passed, will affect most businesses operating within the state. It is the Consumer Data Privacy Act, HB 1049. Like a recently passed privacy bill in California (California Consumer Privacy Act), HB 1049 could govern how franchisors and franchisees collect, share, and use consumers’ personal information to create business opportunities. The bill is pending, submitted to the Consumer Affairs committee in April of 2019.
Pennsylvania is not a registration state for franchises, which means that you don’t have to submit your FDD to a state regulator for review. While there are no specific franchise requirements for the state of Pennsylvania, you must still comply with national franchise laws.
Frequently Asked Questions for Franchisors in Pennsylvania
Does Pennsylvania require franchisors to register their Franchise Disclosure Documents (FDD) with the state?
No, Pennsylvania is not a franchise registration state. Franchisors do not have to submit their FDD to a state regulator for review. However, compliance with federal franchise laws and regulations is still required.
How might the proposed Pennsylvania Consumer Data Privacy Act (HB 1049) affect franchisors?
If passed, HB 1049 will regulate how franchisors and franchisees collect, share, and use consumers’ personal information. This could impact franchise operations by requiring stricter data privacy practices similar to California’s Consumer Privacy Act.
What legal support is available for franchisors operating in Pennsylvania?
Spadea Lignana offers a cost-effective flat fee program called CORE that covers ongoing legal needs such as FDD updates, franchise agreement execution, and state registrations. This program helps franchisors manage compliance efficiently without hourly billing concerns.
Can franchisors based in Pennsylvania easily access legal services for multi-state franchise operations?
Yes, Spadea Lignana, located in Philadelphia, provides legal support not only for Pennsylvania but also for franchise systems across the Northeast including New York, New Jersey, Vermont, Massachusetts, Connecticut, Maine, Rhode Island, and New Hampshire.
Why is it important for franchisors in Pennsylvania to stay informed about state legislation?
State legislation like HB 1049 can introduce new regulations affecting business operations, especially concerning consumer data privacy. Staying informed helps franchisors adapt their practices promptly to remain compliant and protect their franchise system.
Franchising may go all the way back to 1731 in Philadelphia, when Benjamin Franklin signed a “co-partnership” for a printing service with Thomas Whitmarsh.
PA is one of the top 10 states in the U.S. with the highest number of franchise establishments (26,626), corresponding to states with the highest populations.
Flat Fee Program for Franchisors
Spadea Lignana’s CORE program for franchisors is a cost-effective and practical solution for the ongoing legal needs of franchisors, including but not limited to, FDD updates, state registrations and franchise agreement executions. Through a proprietary cloud-based system we can effectively and efficiently manage FDD Disclosures and Franchise Agreement executions for fair flat fees billed monthly. We believe that hourly billing, although necessary in certain circumstances like complex M&A deals and litigation, can weigh on the relationship between client and attorney. By coming up with a fair flat monthly fee, the uncomfortable negotiating of whether or not a 6 minute increment in your bill for replying to an email was legitimate goes away.
Attorneys Who Understand PA Franchise Law
Franchise laws vary from state to state, and it can be difficult to understand the requirements. Spadea Lignana has streamlined the process to ensure you remain compliant as you grow nationally. Our corporate office is located in Philadelphia, making it easy for PA franchisees and franchisors to meet with us in person.
We also work with franchise systems across the northeast including New York, New Jersey, Vermont, Massachusetts, Connecticut, Maine, Rhode Island, and New Hampshire.
