What are the restrictions on franchise activities?

In Virginia, any franchise activities must comply with the Virginia Franchise Act (VFA), which outlines the restrictions on such activities. The VFA restricts the scope of activities that a franchisor can undertake, such as offering, granting, soliciting, or promoting a franchise agreement in Virginia. The VFA also imposes certain requirements on the franchisor when they offer or grant a franchise. These requirements include providing certain disclosure materials, such as a franchise disclosure document (FDD), to potential franchisees. The FDD must provide key information about the franchisor’s business, such as its financial details and litigation history. The VFA also requires franchisors to register their franchises with the Virginia State Corporation Commission (SCC). The VFA also establishes certain restrictions on the activities of franchisees. Franchisors must provide franchisees with a contract, and the contract must provide certain protections to franchisees, such as the right to terminate the franchise agreement and the right to receive a refund of any money paid. In addition, the VFA prohibits franchisors from imposing certain types of restrictions on the activities of franchisees, such as the right to exclusive territories or the right to engage in certain types of advertising. Finally, the VFA also imposes certain restrictions on the transfer of franchises. For example, franchisors must provide written consent prior to the transfer of the franchise and must provide notice to the SCC when a franchise is sold or transferred. Additionally, parties to a franchise agreement are prohibited from transferring any rights or obligations under the agreement to a third party without the written consent of the other party.

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What are the restrictions on franchise activities?

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