Franchise Lawyer Reveals the 4 Important Factors that You Must Consider Before Buying a Franchise in New York

If you are considering the purchase of a franchise in New York chances are that you have researched various franchise opportunities, spoke with sales representatives, received the franchisor's disclosure document and possibly attended a "discovery day seminar" with the franchisor's management team. Having reached this stage of the "franchise evaluation process" - before you sign any agreement or pay any deposit - there are a number of "due diligence" factors and information that you must consider and evaluate:
  • 1. Franchise Relationships are "Contractual Relationships" - Before you invest substantial capital into a franchise system and become a franchisee you must understand the legal rights that you are acquiring and the obligations that you are undertaking as a franchisee. The terms of your franchise agreement are critically important and will have a substantial effect on the profitability of your business operations for many years to come.
  • 2. Franchise Agreements are Negotiable and Critical Modifications may be Achieved - Although many franchisors present franchise agreements as "formal" "non-negotiable" legal documents that cannot be modified or negotiated - this is not the case. Franchise agreements are commonly modified through an addendum process to implement substantial protections and rights for certain franchisees. Before signing a franchise agreement, review the terms of the agreement with your franchise lawyer and discuss potential rights (to protect your interests as a franchisee) that may be negotiated and added to your franchise agreement.
  • 3. Don't Ignore the Franchise Disclosure Document ("FDD") - Under federal law - for your protection as a prospective franchisee - you must receive a copy of the franchisor's "franchise disclosure document" (also known as an "FDD") no less that 14 days prior to paying any fee or signing any franchise agreement. FDD's are not just "legal documents" to be ignored but rather critical disclosures that serve as an important "life line" between making a good decision and a bad one. Spend the time to review the contents of the FDD and have the disclosures contained in the FDD by a franchise lawyer.
  • 4. Contact Existing Franchisees - Existing franchisees (of the franchise system that you are evaluating), are critical sources of information. Before signing any franchise agreement review the list of existing franchisees (existing franchisees are identified and listed in "Item 20" of the franchise disclosure document) and contact as many franchisees as possible to question their satisfaction with the franchisor and the franchise system. Take franchisee complaints seriously. For some advice about the types of questions that you should be asking existing franchisees, I recommend "Three Initial Questions that you Should Ask Existing Franchisees" at the Franchise Law Blog.


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 or Franchise" 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 or Franchise" 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.
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