Let’s assume that you are buying a franchise. You have done your research and you have found the right franchise lawyer – he or she is experienced, has a great attitude and is a good fit. So, how do you get the most out of your relationship with your franchise lawyer? Answer: you share your expectations and you understand what the franchise and FDD review process is all about.
Let’s start with expectations.
Consider that what may or may not be a good franchise investment for you may very will be a good investment for others. Your expectations are critical and need to be thoroughly discussed with your lawyer. For example:
- Are you buying the franchise to replace a job or to supplement your income;
- Do you have a spouse that works full time;
- Are you relying on a belief or expectation that the franchised business will generate a certain level of income for you;
- Are you relying on others to assist you in the day to day operations of the franchise business; and
- Why are you interested in this particular franchise.
It’s critical that you evaluate and discuss these “expectations” or factors with your lawyer as they can influence whether or not the franchise investment may or may not work for you and they will guide your attorney as to potential negotiating points that need to be addressed before you sign a franchise agreement.
Next, Let’s Discuss “Understanding the Process.”
The “process” that I am talking about is your pre-purchase, pre-franchise agreement due diligence and understanding the role that your franchise lawyer should be serving. If you are looking toward your franchise lawyer as a means to an end, i.e., that he or she will, basically tell you where to sign the franchise agreement, then you are making a mistake. A big mistake. Look, we started this off with the premise that you have hired the right franchise lawyer and that he or she is experienced, has done this before and pretty much has seen it all. If that is the case then why not knowledge his or her experiences and advice. Share your expectations with him or her and rely on his or her advice as to whether or not there are red flags and warnings signs that warrant caution and possibly walking away from the deal.
Sometimes, no deal is the best option.
For some straight forward insider information about buying a franchise, order a complimentary copy of my book: “An Entrepreneurs Guide to Buying a Franchise”
You’ve done the research, talked to other franchisees, found a great potential location, and even met with the franchise development director. You’re reasonably certain that this is the franchise you’re going to open. Now, your next step is to talk to an experienced New York franchise lawyer.
Once you’ve researched attorneys and decided to speak to a few of them in person, it’s important to prepare for the meeting so that you get the most out of the conversation. Most prospective franchisees need their attorney to review the franchise agreement first. How do you choose the right attorney for this task? Keep these tips in mind:
Read the agreement yourself first.
When you read the franchise agreement on your own first, you gain two advantages. First, you’ll know what parts you have specific questions about, so you can ask the attorney up front about your concerns. Second, if you have a specific change in mind, you may be able to convince the franchisor to make the change without going through your lawyer – saving you time and money. If the franchisor refuses, you’ll know exactly what to say when you talk to your lawyer.
Choose a lawyer who understands franchise agreements.
Not all attorneys have experience handling franchise law and franchise agreements, even if they know small business law. Make sure your lawyer specializes in franchises. Getting referrals from other franchisees can help.
Ask for an estimate or a fixed rate to review the franchise agreement.
Many lawyers will discuss fees and costs up front. Make sure you have a number in mind before you leave the meeting and that this number fits your budget.