Contacting Existing Franchisees Before Signing a Franchise Agreement | Franchise Law Blog

Contacting Existing Franchisees Before Signing a Franchise Agreement

Before You Sign the Franchise Agreement

You have identified a franchise concept that you are extremely interested in.  You have met with the franchisor’s sales staff‚ completed an application and are impressed‚ so far‚ by what you see. However‚ before taking that next step‚ before paying a franchise fee or signing a franchise agreement‚ contact existing franchisees to get the “inside track”. 

Where Do You Get Existing Franchisee Information? 

In the franchisor’s disclosure  document (also known as the “FDD” and formally known as a Uniform Franchise  Offering Circular) that must be provided to you by the franchisor at least 14  calendar days prior to you signing a franchise agreement or paying any fee to  the franchisor.  The FDD is an extensive document and‚ quite frankly‚ one of the few “life-lines”  that will be available to help you make a true assessment of the franchise opportunity that you are considering. The legally mandated information contained in the FDD‚ and thereby disclosed to you as a prospective franchisee‚ is extensive‚ extremely relevant and should be reviewed with both a franchise lawyer and business accountant.  However‚ sticking to the point of this article‚ that is obtaining information from existing franchisees‚ please know the following:

Evaluate and Use Discretion

When purchasing a franchise‚ there is a lot to consider and‚ inevitability – like every entrepreneur‚ you are bound to make mistakes. However‚ by contacting existing (and terminated) franchisees you can learn from some of their mistakes and cut down on your own. When buying a franchise‚ I recommend a thorough due diligence process and learning what steps to take and mistakes to avoid when buying a franchise.

Related Articles:

Date: 01/31/2014 | Category: General

Let's Talk

With services to make your growth strategy simple, cost effective, and with a team excited to help you, let’s talk about how we can help grow your brand. Click on the button below or call us at (800) 976-4904.

Let’s Talk

With services to make your growth strategy simple, cost effective, and with a team excited to help you, let’s talk about how we can help grow your business.

Fill out the following form and we’ll contact you as soon as possible. To reach our team directly, give us a call at (800) 976-4904.

An attorney client relationship is not established by submitting this initial contact information.

closeIcon