Can a franchisor tell me what prices to charge?

A franchisor can set maximum prices and can recommend prices, but mandating minimum prices raises antitrust issues — judged under the rule of reason federally and treated as per se illegal in a few states. Most franchisors therefore only suggest prices. If yours insists on minimum prices, get legal advice.

Can a franchisor change the rules after I sign?

Largely yes, through the operations manual, which is usually incorporated into the agreement and can be updated. That is why the manual’s scope matters as much as the contract. Your protection comes from reading both before you sign and from any franchise-relationship law in your state.

Can the franchisor force me to buy from specific suppliers?

Commonly, yes. Approved-supplier and required-purchase clauses (FDD Item 8) are standard and enforceable. Understand which inputs are mandated and how that affects your margins before you buy.

Does the franchisor control my hiring?

Usually not. Staffing, scheduling, and day-to-day people management are typically yours, though you must still meet training and service standards set by the system. Thinking about buying a franchise? Reidel Law Firm reviews the FDD and franchise agreement on a flat fee, so you know exactly how much control you are agreeing to before you sign. Get a flat-fee FDD review →

FRANCHISE LAW

How Much Control Does a Franchisor Have Over You?

Schuyler 'Rocky' Reidel July 23, 2024 5 min read

A franchisor controls almost everything that touches the brand — operations, suppliers, branding, and store standards — but its control over the prices you charge is legally limited. When you buy a franchise, you are buying the right to run someone else’s system their way. The franchise agreement and operations manual set the rule