Entering the world of franchising can be an exciting and lucrative step into business ownership. But whether you plan to operate in Massachusetts, Rhode Island, or both, the franchise purchase process in 2025 demands careful legal planning, rigorous due diligence, and a deep understanding of state-specific regulations.
As a full-service business and franchise law firm serving both states, Percy Law Group, PC has helped countless entrepreneurs evaluate, negotiate, and successfully purchase franchise opportunities. This comprehensive 2025 guide explains how to purchase a franchise in Massachusetts, how the process differs when purchasing a franchise in Rhode Island, and what steps you must take to protect your investment from day one.
Why Franchising in 2025 Requires Legal Strategy—Not Just Enthusiasm
Franchising offers brand recognition, built-in support, and a proven operational system. However, it also involves long-term contracts, mandatory fees, and strict operational controls. In states like Massachusetts and Rhode Island—each with unique regulatory landscapes—the legal side of franchising is as important as the business side.
In 2025, Percy Law Group, PC continues to see franchise buyers face recurring challenges:
- Overestimating profit potential
- Underestimating local zoning and licensing burdens
- Signing franchise agreements without understanding long-term restrictions
- Overlooking franchisor performance and financial stability
- Failing to negotiate terms that could reduce risk
A franchise purchase is not a simple transaction—it is a multi-year legal and financial commitment. The steps below will help you navigate the process with confidence.
1. Understand the Regulatory Framework Before You Begin
Purchasing a franchise requires compliance with both federal law and state law. Understanding the difference between Massachusetts and Rhode Island is essential.
Federal Law: The FTC Franchise Rule (Applies Nationwide)
No matter where you buy, the FTC Franchise Rule requires franchisors to provide a Franchise Disclosure Document (FDD) at least 14 days before you sign or pay anything.
The FDD includes 23 required sections such as:
- Fees and initial investment
- Litigation history
- Territory rights
- Training and support
- Financial statements
- Restrictions on goods/services
- A sample franchise agreement
This will be the backbone of your due diligence.
Massachusetts Franchise Law: A “Non-Registration” State
Massachusetts does not require franchisors to register their FDD with the state. This means:
- The franchisor is not reviewed or approved by the state
- Buyers receive fewer built-in statutory protections
- Your contract governs your rights far more than state law does
As a result, reviewing and negotiating the franchise agreement with an attorney is especially important in Massachusetts.
Local considerations such as zoning, employment regulations (especially wage and hour law), and business licensing also heavily impact franchise operations.
Rhode Island Franchise Law: A “Registration” and Disclosure State
Rhode Island’s Franchise Investment Act requires franchisors to:
- Register their franchise offering
- Comply with additional state disclosure requirements
- Report material changes to their offering
- Abide by state restrictions on advertising and solicitation
For Rhode Island buyers, this means:
- You get additional protection through state regulatory oversight
- Some franchisors may delay or refuse sales until their filings are approved
- Negotiated terms may require updated filings
Percy Law Group, PC regularly assists clients in ensuring franchisors meet state requirements before a purchase occurs.
2. Define Your Business Goals and Realistic Budget
Before reviewing any FDD or franchise agreement, determine what you want:
What type of franchise buyer are you?
- Owner-operator: You will actively manage the business
- Semi-absentee: You hire a manager but remain hands-on
- Investor: Hands-off approach, often requiring multi-unit commitments
Assess your financial capacity
Your FDD will show an initial investment estimate, but you must account for:
- Working capital for 3–6 months
- Build-out delays
- Massachusetts and Rhode Island labor costs
- Local permitting costs
- Higher construction costs in certain municipalities
Percy Law Group, PC, encourages buyers in 2025 to create conservative, reality-based financial projections—especially given rising lease rates and labor expenses across both states.
3. Obtain, Review, and Understand the FDD (with Legal Support)
The Franchise Disclosure Document is your primary due diligence tool.
Key FDD Items to Analyze Carefully
Item 5 & 6: Fees
Expect to see:
- Initial franchise fee
- Ongoing royalties
- Marketing and technology fees
- Renewal and transfer fees
These fees will define your monthly overhead for years.
Item 7: Estimated Initial Investment
Compare the franchisor’s range against:
- Massachusetts build-out costs
- Rhode Island permit fees
- Market-specific rent rates
- Local contractor availability and pricing
Item 8: Required Vendors and Purchasing
Many franchisors restrict where you buy equipment, goods, and supplies. This can significantly impact your costs.
Item 11: Training & Support
Some franchisors promise robust support; others offer minimal assistance. We evaluate how realistic and enforceable their obligations are.
Item 17: Renewals, Transfers, Termination
This is one of the most legally important sections. It explains:
- When the franchisor can terminate you
- Whether you can renew and at what cost
- Conditions for selling the business
- Whether disputes must be arbitrated or litigated
Why legal review matters more in Massachusetts
Because Massachusetts offers fewer statutory protections, your contract is everything.
Why legal review matters differently in Rhode Island
In Rhode Island, the Franchise Investment Act gives you added rights—but only if understood and applied correctly.
4. Review and Negotiate the Franchise Agreement
Franchise agreements are long, one-sided contracts written by franchisors. However, strategic negotiation is still possible—especially when guided by experienced counsel.
Common areas Percy Law Group, PC negotiates for clients
Territory Protections
- Is your area exclusive?
- Can the franchisor open related concepts nearby?
- Are online sales included?
Personal Guarantees
Most franchisors require personal guarantees; we work to limit exposure where possible.
Non-Compete Clauses
Massachusetts and Rhode Island courts handle non-competes differently. Duration, geography, and scope must be evaluated closely—especially after termination.
Default & Termination
We look for:
- Reasonable cure periods
- Protection against arbitrary termination
- Preservation of investment value
Renewal & Resale Rights
These terms determine your long-term exit strategy and future profitability.
5. Perform Local Due Diligence: Zoning, Permits, and Compliance
Even if the franchise is strong, local conditions can make or break a business.
Massachusetts Due Diligence Considerations
- Zoning approvals (especially for restaurants, gyms, retail)
- Business registration with the Secretary of the Commonwealth
- Local Board of Health permitting for food-related businesses
- ADA compliance and building code requirements
- Strict employment regulations (PFML, meal breaks, minimum wage laws)
Massachusetts is known for stringent municipal processes. Franchises in Boston, Newton, Worcester, and Newburyport often face more layers of approval than those in suburban or rural towns.
Rhode Island Due Diligence Considerations
- Confirmation of franchisor compliance with the RI Franchise Investment Act
- Local licensing in communities like Warwick, Providence, Cranston, and Smithfield
- State-level tax implications
- Build-out approvals through local planning boards
Percy Law Group, PC assists clients in avoiding common regulatory pitfalls that delay openings or increase costs.
6. Speak with Current and Former Franchisees
The FDD includes contact information for all existing and former franchisees.
Questions to ask:
- What were your actual startup costs?
- How supportive is the franchisor?
- What challenges did you face with Massachusetts or Rhode Island regulations?
- Would you buy the franchise again?
Percy Law Group, PC, helps clients create structured due diligence questionnaires to identify potential red flags.
7. Secure Financing and Form Your Business Entity
Most franchise purchasers rely on:
- SBA 7(a) loans
- Traditional bank loans
- Franchisor financing
- Private investor capital
Loan documents often contain provisions that must align with your franchise agreement. We review:
- Personal guarantee requirements
- Default triggers
- Cross-default issues between loan and franchise obligations
Entity Formation: MA vs. RI
Depending on where you're located and where the franchise operates, we advise on:
- Massachusetts LLC or corporation
- Rhode Island LLC or corporation
- Foreign registration requirements
- Tax planning for multi-state operations
8. Finalize Negotiations and Close the Deal
Although franchisors claim franchise agreements are “non-negotiable,” Percy Law Group, PC routinely negotiates:
- Territory clarity
- Reasonable cure periods
- Build-out timelines
- Softened default conditions
- Additional training support
- Adjustments based on specific Massachusetts/Rhode Island requirements
For Rhode Island agreements, negotiated terms may also require updated state filings, which we coordinate.
Once all due diligence steps are complete, we guide you through signing:
- The franchise agreement
- Multi-unit commitments (if applicable)
- Personal guarantees
- Lease or site-development agreements
- Loan documents
Why Work With Percy Law Group, PC in 2025?
When purchasing a franchise in Massachusetts or Rhode Island, you need more than contract review—you need a legal partner who understands:
- Cross-border business operations
- Local zoning and licensing challenges
- State-specific employment law requirements
- The true implications of franchise contracts
- How franchising trends are evolving in 2025
Percy Law Group, PC provides:
✔ Comprehensive legal guidance
From FDD review to negotiation to closing.
✔ Massachusetts and Rhode Island expertise
Local insight that national franchise attorneys often overlook.
✔ Strategic risk reduction
Protecting your investment before you sign—not after a problem arises.
✔ Client-focused service in 2025
Clear, responsive communication at every stage.
Ready to Purchase a Franchise in Massachusetts or Rhode Island in 2025?
Start With a Consultation.
If you're evaluating how to purchase a franchise in Massachusetts or Rhode Island in 2025, the smartest first step is simple:
Talk to Percy Law Group, PC before you sign anything.
We help franchise buyers:
- Review FDDs and franchise agreements
- Evaluate financial and structural risks
- Navigate state regulatory requirements
- Structure entities and negotiate leases
- Protect their long-term investment
Contact Percy Law Group, PC today to schedule a comprehensive franchise purchase consultation and begin your path to successful franchise ownership in Massachusetts or Rhode Island in 2025.