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Buying a Franchise FAQ's

What Information Does a Franchise Disclosure Document Contain When Buying a Franchise?

A franchise disclosure document, also referred to as an FDD, contains 23 topics which are referred to as items and is a few hundred pages in length.

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What negotiated changes should a franchisee make to a franchise agreement?

Well, there are many and they vary depending on the franchise opportunity.

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Can I negotiate franchise fees with the franchisor?

Typically franchise fees are not negotiable but if you are dealing with a start-up franchisor you may find that the franchisor is willing to negotiate.

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Can I negotiate franchise royalty fees in the Franchise Agreement?

Typically no, you cannot negotiate royalty fees.

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How are royalties calculated?

When purchasing a franchise, be aware that royalties represent a continuing commitment that, typically, will involve the payment of royalty fees on a weekly or monthly basis.

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Will a franchisor provide me with marketing materials after I buy a franchise?

They should. But marketing materials are not enough…

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What legal factors influence my franchise investment?

The legal factors that will influence your franchise investment are your ability to sell certain goods or services, protection of the territory you’re being granted and whether or not the franchisor can allow third parties into your territory.

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How will my New Jersey Franchise Lawyer assist me in buying a franchise?

There are many roles that your franchise lawyer should serve before you sign a franchise agreement.

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What is a Franchise Disclosure Attorney?

When you refer to a "Franchise Disclosure Attorney" you are referring to…

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When Buying a Franchise Should I Contact Existing Franchisees?

Absolutely. When buying a franchise it is always best to contact existing franchisees before moving forward with the purchase.

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How long is the process for reviewing a FDD before buying a franchise?

At The Internicola Law Firm, P.C. the process to review a FDD generally takes about a week to two weeks.

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What is the cost to have a FDD reviewed by a franchise lawyer when purchasing a franchise?

When it comes to the purchase of a franchise - over the many years of assisting clients with their FDD reviews - we have developed specific franchise review programs with a fixed legal fee.

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What is the large document that needs to be reviewed prior to buying a franchise?

The large document (200+ pages) that should be reviewed prior to purchasing a franchise is the Franchise Disclosure Document ("FDD").

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What is the cost of the initial conference call about buying a franchise?

The initial conference call with franchise lawyer Charles Internicola is completely free.

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Is Charles Internicola experienced in franchise purchases?

Yes. Charles Internicola is an experienced and well known franchise lawyer who has helped franchisees throughout the United States.

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What information is contained in FDD Item 6?

Franchise Disclosure Document Item 6 is titled "Other Fees".

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What information is contained in FDD Item 20?

Franchise Disclosure Document Item 20 is titled “Outlets and Franchise Information”.

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What are Royalties when Buying a Franchise?

If you are buying a franchise then one of your primary obligations will relate to the payment of royalties to the franchisor.

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What is a Franchise Operations Manual?

A franchise operations is a confidential manual provided by franchisors to franchisees.

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What is a Non-Compete Clause in a Franchise?

The relationship between franchisee and franchisor is governed by a franchise agreement.

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What is an Exclusive or Protected Territory when Buying a Franchise?

When buying a franchise an Exclusive or Protected Territory relates to the location where you will be establishing and operating your franchised business and the surrounding area or radius exclusive to your business.

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What is a Franchise Renewal?

Franchise renewal refers to a franchisees renewal of the franchisee's right to continue to operate a particular franchised business.

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What are Franchise Area Development Rights?

Franchise area development rights are granted to franchisees who are known as "sub-franchisors", "area representatives" and "master franchisees".

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Where can I find a list of franchisors registered in New York?

A list of franchisors registered in New York to offer and sell franchises can be obtained by contacting the New York Attorney General's office at 212-416-8637, 212-416-8235, or 212-416-8236.

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What is a Item 7 Estimated Initial Investment FDD Disclosure?

Pursuant to the Federal Franchise Rule, Franchisors must include in the FDD information containing an estimate of your initial investment.

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What Are My Rights Under The Franchise Agreement?

If you are considering buying a franchise, then you should know what rights will be provided under your franchise agreement.

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What is a Franchise Agreement Term?

The “term” of your franchise agreement relates to the fixed period of time during which you will possess the right to own and operate your franchised business.

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Can I Negotiate and Change the Terms of a Franchise Agreement?

Yes - the terms of a franchise agreement can be negotiated.

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What is a "Protected Franchise Territory"?

With regard to franchise agreements and the rights granted to franchisees, a "protected territory" is a designated geographic area whereby a franchisor agrees not to sell or grant additional franchises.

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What is the New Jersey Franchise Practices Act?

The New Jersey Franchise Practices Act (N.J.S.A 56:10-1 et seq.) regulates the relationship between franchisors and franchisees in the State of New Jersey.

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How to Enforce Your Rights Under the New Jersey Franchise Practices Act?

When faced with issues of termination or a dispute with a franchisor, the rights and remedies of a New Jersey franchisee are enforced through the commencement of of a civil lawsuit.

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Are legal fees recoverable against a franchisor in a lawsuit?

Yes. If a franchisee is successful in litigation establishing that the franchisor violated the New Jersey Franchise Practices Act, the franchisee may recover legal fees.

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What is a "Franchise Fee"?

The term "franchise fee" refers to the up front charge/fee paid by a prospective franchisee to a franchisor to obtain the right to become a franchisee and to establish and operate a franchise.

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How do I find the best franchise lawyer?

Finding the right franchise lawyer requires an evaluation of the attorneys experience, client reviews and rankings from independent attorney review services like AVVO and SuperLawyers.

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Do I need a lawyer to buy a franchise?

When buying a franchise you will be required to invest significant capital (possibly your life savings) and undertake serious legal obligations.

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When must a franchise disclosure document (FDD) be delivered to a franchisee?

Under the Federal Franchise Rule, Franchisors must provide "prospective franchisees" (considering the purchase and investment in a franchise) with the Franchisor's Franchise Disclosure Document at least fourteen (14) days prior to signing any contract with the franchisor or paying any money to the franchisor.

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What is a Franchise Agreement?

A franchise agreement is a legal document between a franchisor and franchisee.

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