Buying a Franchise: “Are you Wasting your Money if You Speak to a Franchise Lawyer”?
This morning I spoke to a franchisee who spent hundreds of thousands of dollars buying a franchise and establishing its operations. The franchisee is currently experiencing losses and is extremely dissatisfied with the lack of support by the franchisor and issues involving encroachment and lost sales to corporate owned stores. Significantly‚ the franchisee did not review the franchise agreement prior to buying. When I asked the franchisee why‚ I received the following response:
Because the franchisor’s representative told me “you can get an attorney if you want but you would just be wasting your money because we will not make changes to the franchise agreement”.
Buying a franchise? We recommend reading:
Lets think about this. First‚ many franchisors make this statement‚ yet‚ during the latter stages of the negotiation process‚ they do make changes. Second‚ and more importantly‚ a legal review of your franchise agreement and the franchisor’s FDD is a critical part of the “due diligence” process that you must take before you buy a franchise.
I know for a fact that many of the issues that I discussed with this franchisee would have been addressed in our FDD review. In fact‚ many of the issues that the franchisee mentioned are‚ more often than not‚ topics of conversation that I have with my franchisee clients.
So‚ before you buy a franchise‚ consider that every step of the due diligence process (including review by a franchise lawyer) is critical to equipping yourself with the necessary information to make the right decision.
Continue reading about Buying a Franchise
By Charles Internicola May 16, 2012
Franchise ChannelWhat Our Clients Say About The Internicola Law Firm
- Business Transactions
- Buy a Franchise
- Corporate Counsel
- Firm News
- Franchise Your Business
- Grow Your Franchise
- Intellectual Property
- Partnership Disputes
- Start a Franchise
- Do You Need to Have Multiple Locations to Franchise Your Business?
- Don’t Hire a Franchise Consultant if you see these Warning Signs!
- When is the Right Time to Franchise Your Business?
- How to Improve Your FDD Item 19 Financial Performance Representations in 2021 and Beyond (With COVID Impact)
- Should You Create an Education and Training Business Instead of Franchising?