What are the laws regarding franchising agreements?

In Hawaii, franchising agreements are governed by the same laws as any other business contracts. This means that the parties to the agreement must enter into the contract voluntarily and have the capacity to do so. The parties must then abide by the terms of the contract. In addition to these state laws, the Federal Trade Commission (FTC) also imposes certain restrictions on franchising contracts. For example, franchisors are required to provide potential franchisees with a disclosure document which contains information about the business venture, including the franchise fees, length of the agreement and any restrictions on the franchisee’s activities. This document must be provided at least 14 days prior to signing the agreement. The FTC also has an ‘establishment claim’ which states that franchisors must provide potential franchisees with an earnings claim that is based on the actual results of their business operations. This claim must also be included in the disclosure document. Finally, it is important to note that the Franchising Code of Conduct regulates franchising agreements in Australia, including Hawaii. This code outlines the rights and responsibilities of franchisors and franchisees and provides guidance on how franchising agreements should be formulated. In summary, franchising agreements in Hawaii must comply with state and federal laws, as well as the Franchising Code of Conduct. Both parties must enter the agreement voluntarily and possess the capacity to do so. The franchisor must also provide potential franchisees with a disclosure document which contains the required information and an earnings claim that is based on actual results.

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What are the laws regarding franchising agreements?

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