Photo of Carlie Smith

Carlie Smith

Subscribe to Carlie Smith's Posts

Carlie works with franchisors and franchisees to grow their brands and businesses by helping them to comply with state and federal franchise regulations and navigate corporate transactions.  Carlie often assists hospitality and restaurant brands in navigating the regulatory permitting process.

Prior to joining Manning Fulton, Carlie worked as a law clerk at Kirton McConkie, a Salt Lake City law firm. During law school she interned with Judge Thomas B. Griffith of the United States Court of Appeals for the District of Columbia Circuit and Justice Thomas R. Lee of the Utah Supreme Court.

Contact:Read more about Carlie Smith

Franchise disclosure obligations and registration can carry significant costs of compliance and can be an administrative burden. Initially drafting a compliant Franchise Disclosure Document (“FDD”) is a time-intensive process. Then the franchisor must update the FDD annually for as long as it wishes to sell franchises. State registration of the franchisor and review of the FDD can further delay franchise sales. Additionally, an FDD contains confidential information that the franchisor may not wish to make public, especially if the business is a particularly sensitive to competition. Franchise laws restrict otherwise legal sales practices, such as making financial performance representations outside of Item 19, which can be another frustration for franchisors.

Exemptions to the franchise disclosure and registration laws provide both seasoned and start up franchisors the opportunity to reduce these burdens and costs by either (1) avoiding registration in a state or (2) avoiding drafting an FDD at all.
Continue Reading FTC Franchise Exemptions: Fractional Franchises

Franchise disclosure obligations and registration can carry significant costs of compliance and can be an administrative burden. Initially drafting a compliant Franchise Disclosure Document (“FDD”) is a time-intensive process. Then the franchisor must update the FDD annually for as long as it wishes to sell franchises. State registration of the franchisor and review of the FDD can further delay franchise sales. Additionally, an FDD contains confidential information that the franchisor may not wish to make public, especially if the business is a particularly sensitive to competition. Franchise laws restrict otherwise legal sales practices, such as making financial performance representations outside of Item 19, which can be another frustration for franchisors.

Exemptions to the franchise disclosure and registration laws provide both seasoned and start up franchisors the opportunity to reduce these burdens and costs by either (1) avoiding registration in a state or (2) avoiding drafting an FDD at all.
Continue Reading FTC Franchise Exemptions: Large Investment Exemption

Franchise disclosure obligations and registration can carry significant costs of compliance and can be an administrative burden. Initially drafting a compliant Franchise Disclosure Document (“FDD”) is a time-intensive process. Then the franchisor must update the FDD annually for as long as it wishes to sell franchises. State registration of the franchisor and review of the FDD can further delay franchise sales.
Continue Reading FTC Franchise Exemptions: Insiders Exemption

Franchise disclosure obligations and registration can carry significant costs of compliance and can be an administrative burden. Initially drafting a compliant Franchise Disclosure Document (“FDD”) is a time-intensive process. Then the franchisor must update the FDD annually for as long as it wishes to sell franchises. State registration of the franchisor and review of the FDD can further delay franchise sales. Additionally, an FDD contains confidential information that the franchisor may not wish to make public, especially if the business is particularly sensitive to competition. Franchise laws restrict otherwise legal sales practices, such as making financial performance representations outside of Item 19, which can be another frustration for franchisors.

Exemptions to the franchise disclosure and registration laws provide both seasoned and start up franchisors the opportunity to reduce these burdens and costs by either (1) avoiding registration in a state or (2) avoiding drafting an FDD at all.

In this blog post series, we summarize the exemptions available under the Federal Trade Commission Franchise Rule (“Rule”), which allow a franchisor to sell a franchise without an FDD. Any analysis of what exemptions apply to your brand is incomplete if you do not also consider the application of state law. States may not recognize the federal exemptions and may offer different exemptions to their registration requirements.Continue Reading FTC Franchise Exemptions: Minimum Payment Exemption

Franchise disclosure obligations and registration can carry significant costs of compliance and can be an administrative burden. Initially drafting a compliant Franchise Disclosure Document (“FDD”) is a time-intensive process. Then the franchisor must update the FDD annually for as long as it wishes to sell franchises. State registration of the franchisor and review of the FDD can further delay franchise sales. Additionally, an FDD contains confidential information that the franchisor may not wish to make public, especially if the business is a particularly sensitive to competition. Franchise laws restrict otherwise legal sales practices, such as making financial performance representations outside of Item 19, which can be another frustration for franchisors.

Exemptions to the franchise disclosure and registration laws provide both seasoned and start up franchisors the opportunity to reduce these burdens and costs by either (1) avoiding registration in a state or (2) avoiding drafting an FDD at all.

In this blog post series, we summarize the exemptions available under the Federal Trade Commission Franchise Rule (“Rule”), which allow a franchisor to sell a franchise without an FDD. Any analysis of what exemptions apply to your brand is incomplete if you do not also consider the application of state law. States may not recognize the federal exemptions and may offer different exemptions to their registration requirements.Continue Reading FTC Franchise Exemptions: Large Franchisee Exemption

Data privacy is a rapidly developing area of law that can create significant compliance obligations for small, medium, and large companies.  Data privacy, or the right of individuals to control their personal information, is addressed by a patchwork of state and federal laws. Knowing which laws affect your business can be challenging, especially if…

One central benefit that franchisees seek from joining a franchise system is the leadership of the franchisor’s team. This team controls the brand standards, leads national marketing, gives advice and support, and is responsible for brand innovation and development.

Item 2 of the Franchise Disclosure Document (“FDD”) discloses to prospective franchisees who these leaders are and their business experience. Item 2 also discloses who is involved in franchise sales and operations. However, under the requirements of the FTC Franchise Rule, not every leader, manager, or salesperson needs to be included. The below lists summarize who needs to be included in Item 2 and who does not.Continue Reading Who’s Who in Item 2?

The COVID-19 pandemic has dramatically impacted business in 2020, from government stay at home orders that prevented operations to adjusted customer service capacity or additional safety procedures. Some of these changes to your franchise system may be what the FTC or states regard as “material”, meaning the change likely affects a prospective franchisee’s conduct or…

Businesses are increasingly defined by the technologies they use internally or that they offer to their customers; franchisors are no exception Technology is interwoven into the way that businesses think about themselves and the world. For example, Amazon famously declared itself first a technology company that “just happens to do retail.” Developments in technology distinguish companies from their competition and open new growth opportunities.

Your franchise business likely depends of an array of systems to interact with customers, provide goods and services, and link franchisees to you and each other. Or, perhaps, those advancements are still aspirations for your system, and you want to leave the door open to introduce those technologies later.

Having the technology fee disclosed in your Franchise Disclosure Document (“FDD”) and included in your Franchise Agreement provides you with the flexibility to implement technologies systemwide and have your franchisees help bear the cost.Continue Reading What is the Technology Fee and Why Should I Charge My Franchisees One?

Items 5, 6, and 7 of a Franchise Disclosure Document (“FDD”) are all about money – how much the franchisor charges for the goods and services it provides franchisees before the franchised business opens, how much the franchisee will pay to the franchisor throughout the business relationship, and how much the franchisee will need to invest to open the business. After reading Items 5, 6, 7, the franchisee must understand how much things cost, how much they’ll be paying you, and when they will be making payments.

It is important for you to give accurate estimates to avoid litigation risks and help prospective franchisees evaluate their ability to successfully finance and open the business.
Continue Reading Franchise Disclosure Document (“FDD”) Items 5, 6, and 7 Explained