Expert Franchise Attorney Amy Cheng Offers Insights

Amy Cheng is an accomplished attorney specializing in domestic and international commercial transactions, with a particular focus on franchise, licensing and distribution law. She provides comprehensive legal services to franchisors, from structuring and operating franchise programs to regulatory compliance and addressing complex issues related to brand ownership, non-traditional opportunities, system restructuring and brand acquisition.

Cheng’s clientele spans from start-ups to multinational companies, including leaders in the restaurant, retail, fitness and home services industries. She also represents non-U.S. based franchisors entering the U.S. market and private equity firms acquiring franchise companies. Her extensive experience includes advising on mergers and acquisitions, complex commercial relationships and corporate formation.

1851 Franchise recently spoke with Cheng to find out more about her experience in the franchise legal field and for some insights into strategies franchisors can use to navigate legal challenges effectively.

1851 Franchise: How important is the information in Item 19?

Amy Cheng: Extremely important. It is hard for a development team to sell franchises legally without it. Prospective franchisees want the information. Without information to share, you risk your development team making illegal FPRs [financial performance representations]. It’s not only important to have an Item 19, but also to make sure that the information is accurate and you have a reasonable basis to include it. If you have no reasonable basis to include such information or if the information is inaccurate, you are exposing yourself to more risk than not having an Item 19 at all.

1851: What is the single largest legal mistake brands make?

Cheng: Allowing franchisees to be noncompliant for a long period of time before taking any action. An “action” doesn’t necessarily need to be legal action, but it is important to take some kind of action. If you wait too long, then you may have no choice but to take legal action and no franchisor wants to go down that route.