When Buying a Franchise you Must Give Serious Thought to "Restrictive Covenants"

When buying a franchise, justifiably, you prospective franchisee give serious thought to "upfront" costs and obligations such as (a) the initial franchise fee, (b) start-up costs, and (c) royalties (just three of many due diligence factors to consider).  However when evaluating your obligations as a prospective franchisee you must give consideration to and discuss with your franchise lawyer the types of "post termination restrictive covants" that you may be obligating yourself to.

That is, the typical franchise agreement will include "restrictive covenants" that will prohibit you from operating and/or engaging in certain types of business if and when your franchise agreement is terminated.  If you are currently involved in a "line of business" similar to the new franchise that you are purchasing this issue may be even more important since you may be subjecting yourself that "post-termination restrictions" that may prevent you from engaging in a line of business that you have participated in (and based your livelihood on) long before your purchase of any franchise.

Charles N. Internicola is a franchise lawyer who represents individual and established franchisees throughout the United States, in all fifty states, including New York and New Jersey.  Charles is the author of "An Entrepreneurs Guide to Purchasing a Business" and the editor of the "Franchise Law Blog". If you a buying a franchise, it is important that you obtain an independent evaluation of your franchise agreement and FDD from an experienced franchise lawyer.  Contact Charles Internicola to discuss the services that he offers to protect franchisees before you sign any agreements.

If you are considering the purchase of a franchise or business, for a limited time you may receive a complementary no obligation copy of Mr. Internicola's book, "An Entrepreneurs Guide to Purchasing a Business" where you will find helpful information and facts. 


IMPORTANT DISCLAIMER: The information contained on this website is provided for general educational purposes only, should not be relied on as legal advice and does not serve to create an attorney client relationship. In utilizing this website you acknowledge that there is no attorney client relationship between you and Charles N. Internicola, Esq. and that the information contained on this site does not and cannot serve as a replacement for the competent legal advice of a licensed attorney in your state. The content of this website is subject to the Copyright of its author, Charles N. Internicola, Esq.