Washington D.C. Franchise Law and Business Regulations

The D.C. Business Corporation Act of 2010 provides a detailed legal framework for corporations, covering everything from articles of incorporation to the rights of directors, officers, and shareholders. This comprehensive statute serves as the foundational document for corporate governance, ensuring that all entities operate under a clear and consistent set of rules.

Key subchapters include:

• Subchapter II. Incorporation: Governs the process of incorporating a business.
• Subchapter III. Purposes and Powers: Outlines the legal purposes and powers of a corporation.
• Subchapter V. Shareholders: Details the rights of shareholders, including their voting rights.
• Subchapter VI. Directors and Officers: Defines the roles, duties, and liabilities of directors and officers.

Additionally, the Act addresses corporate mergers, share exchanges, and the disposition of assets. For foreign corporations authorized to do business in the District, the Act states they are subject to its provisions but do not need a new certificate of registration if they were already doing business before the Act's effective date. This provision simplifies the transition for established foreign entities, allowing them to continue their operations without administrative disruption.

The Sherman Act is a cornerstone of federal antitrust legislation. It prohibits trusts and other combinations that restrain trade. Section 1 outlaws contracts or conspiracies that unreasonably restrain trade, while Section 2 makes it a felony to monopolize or attempt to monopolize any part of interstate or foreign trade. The Act explicitly applies to trusts in territories or the District of Columbia. Any anti-competitive conduct within D.C. can be prosecuted under federal law. Penalties for violations can be severe, including fines and imprisonment.

Beyond the federal level, Washington D.C. has its own consumer protection laws. The District of Columbia Consumer Protection Procedures Law regulates aspects of franchise and business relationships. The Office of the Attorney General enforces these laws, providing an additional layer of oversight for businesses and consumers.

Specific chapters within Title 17 detail the licensing, certification, and practice requirements for a range of professionals, including counselors. For instance, Chapter 91 governs graduate professional counselors, and Chapter 87 applies to certified addiction counselors. These regulations cover educational requirements, supervision standards, and ethical conduct. Adherence to these specific codes of conduct and licensing prerequisites is mandatory for legal operation in these fields. Additionally, the District's laws extend to new technologies, such as the Autonomous Vehicle Act of 2012, which authorizes self-driving vehicles on D.C. roadways. This detailed regulatory approach demonstrates D.C.'s commitment to governing both established professions and innovative new technologies.

However, franchisors must still adhere to the federal FTC Franchise Rule, which requires them to provide a compliant FDD to prospective franchisees at least 14 days before any agreement is signed. The FDD is a critical legal document providing essential information about the franchisor.

Franchisors and franchisees in Washington D.C. must also be aware of local laws that govern business operations, including labor and employment laws. A franchise lawyer can assist with reviewing the FDD and ensuring compliance. Businesses are also subject to local business taxes. The D.C. Office of Tax and Revenue imposes a minimum tax on corporations and unincorporated businesses based on gross receipts. Properly navigating these financial and legal requirements from the outset is essential for the long-term success and stability of any franchise business in the District.