The Role of Your New York Franchise Lawyer (Part B)

Developing a Game Plan Before You Buy a Franchise
As a prospective franchisee you must understand that not every franchise is right for you. Even if you are impressed with a franchise opportunity and have had impressive conversations with the franchisor and the franchisor's sales staff, you must nevertheless proceed with caution. Information and due diligence is critical - so, before committing to a franchise and even before hiring a franchise attorney adopt an information gathering mindset and understand your due diligence obligations (One source of due diligence information: Order a "free" complimentary copy of Charles N. Internicola's, "An Entrepreneurs Guide to Buying a Franchise"). Before investing in a franchise, some questions that you should be asking and information that you should be assessing, include:

• franchisee satisfaction, what existing "long-term" franchisees have to say about "profitability";
• the franchisor's history and qualifications of the franchisor's officers;
• the franchisor's litigation and bankruptcy history;
• continuing royalty fee structure, how its is calculated and the impact on profitability;
• the successes and failures of other franchisees - number of franchise units closing; and
• the ability to sell the franchise in the future.

Reviewing the FDD, Franchise Agreement and Making Strategic Changes
Review of the FDD and Franchise agreement must be done with a strategic purpose - that is to (a) advise as to how certain legal terms in your franchise agreement will have a tangible impact on your profitability as a franchisee and (b) to negotiate and implement tested franchise agreement modifications that will protect your legal rights and the substantial investment that you will be making.

Some of the Franchise Agreement that require strategic modification, include:

• the required franchise fees;
• the term of the franchise agreement and the future renewal rights;
• non-competition provisions;
• restrictions on the transfer;
• territorial protections;
• the franchisor's obligations to the franchisee;
• the franchisee's rights to the franchisor's trademark;
• whether additional fees may be imposed after execution of the franchise agreement; and
• the franchisor's use of funds that are collected for advertising purposes.

To learn more about your rights as a prospective franchisee and to avoid unnecessary mistakes, for a limited time order a free complimentary copy of Charles N. Internicola's "An Entrepreneurs Guide to Purchasing a Franchise"

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