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Team Franchise Agreements

Do I own the team brand or does the league?

Typically, the league holds the master IP rights, and the team is licensed to use the brand. This ensures centralized marketing control.

Can the league force me to move my team?

Relocation usually requires league approval. Conversely, the league cannot force a move unless specific conditions in the franchise agreement (e.g., lack of stadium) are met.

What is a "Expansion Fee"?

It is the price paid by a new team to join an existing closed league. This fee is often distributed among existing franchise owners.

Is the franchise agreement perpetual?

Most are long-term (e.g., 10+ years) or renewable, provided the team meets financial and operational standards set by the league.

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Team Franchise Agreements are complex legal documents regulating a sports team's participation in a closed league or franchise system. In Georgia, this model is still developing but gaining relevance with the growth of Esports and private commercial leagues. The franchise model differs from the traditional European system (promotion/relegation); here, a team buys a spot in the league and becomes its business partner. The lawyer's role is to ensure that franchise terms are fair, the investment is protected, and league regulations (e.g., salary cap, revenue sharing) are transparent.

What Does the Team Franchise Service Cover?

Our service provides legal support for franchise acquisition and management:

  • Franchise Agreement: Drafting and negotiating the main agreement with the league, defining the Entry Fee, duration, and territorial rights.
  • Operating Rules: Ensuring compliance with the league's Operating Manual: marketing obligations, media rights, ticketing.
  • Revenue Sharing: Legal audit of mechanisms for distributing the league's centralized revenues (TV, sponsorship).
  • Branding and IP: Regulating rights to use the team's logo and name within the league context.
  • Exit Strategy: Outlining conditions for selling the franchise or leaving the league.

Real-World Situations When You Need This Service

Franchise owners face the following challenges:

  • League Restructuring: The league changes format or adds new teams, diluting the existing teams' revenue share. The lawyer defends the owner's interests.
  • Franchise Revocation: The league threatens to revoke the franchise due to failure to meet financial obligations. Negotiation and restructuring are needed.
  • Territorial Dispute: The league allows a new team to locate in your exclusive territory (e.g., the same city).
  • Esports Team Purchase: An investor buys a slot in an international esports league. Verification of a complex cross-border agreement is required.

Georgian Legal Framework

Franchise relations are regulated by the "Civil Code of Georgia" (franchising contract), the "Law on Entrepreneurs", and the "Law on Competition". Since sports franchises are often international, the jurisdiction of the relevant league (often USA, Switzerland, or UK) and arbitration clauses are crucial.

Process: How a Specialist Works

The lawyer's work includes:

  1. Due Diligence: Checking the league's financial status and legal structure.
  2. Negotiation: Optimizing franchise costs and terms.
  3. Corporate Structuring: Establishing the team's management company (SPV).

Why Legal.ge?

Legal.ge offers lawyers with experience in commercial law and sports business. Buying a franchise is a major investment. We will help ensure this investment is secure and profitable in the long run.

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Specialists for this service

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