If you are considering the purchase of a franchise 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:
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. Learn more about reviewing the franchise agreement.
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. Learn more about negotiating franchise agreements.
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. Learn more about reviewing the FDD.
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.
If you are evaluating a franchise opportunity, learn more about our franchise review services.
Are you a franchisor or a part of a franchise sales team? Do you want to learn more about franchise sale compliance and ensure that your sales practices comply with franchise laws and are consistent with best practices? Then this guide is for you. In this guide you’ll learn the... read more
In this guide you’ll learn the basics of franchising, how to franchise your business, and how to win at franchising. We’ll also take a deeper dive into legal requirements for franchising and why they matter, steps to take before and after you launch your franchise, and even some tips on... read more
When considering expanding a business both franchising and licensing are possible options. In this guide, you'll learn the differences of franchising and licensing and understand how each will affect you. read more
Are you considering franchising your business? If so, its important to understand the advantages and disadvantages of franchising your business. Franchising is a legal and business model designed to achieve multi-unit expansion. Compared to organic expansion where you invest in and open multiple locations yourself, franchising allows you to recruit... read more
The documents to franchise your business include the franchise disclosure document (FDD), franchise agreement, operations manual, financial statements, and state specific registration applications. Below we discuss each franchise document in detail. 1. Franchise Disclosure Document Before you can offer or sell a franchise you are required to issue and disclose... read more
Franchising may be the next big step for your business and represents an opportunity to grow your brand. So, how do you know if franchising is right for you? How do you know if your business is franchisable and, if it is, whether or not you should franchise your business?... read more
In this webinar, Charles Internicola and Laura Meyer, founder of Joybrand Creative, talk about how to position your brand to win at franchise sales. Some topics include: How franchisors can develop their brand strategy How to differentiate your brand strategy between your targeted end-user customers and prospective franchisees for franchise... read more
In this webinar, Charles N. Internicola, Esq. and Lisa Welko, CFE of Integrity Franchise Group discuss what it takes to make your brand attractive to franchise brokers and sell to qualified franchisees. Selling franchises and building a durable franchise system - all comes down to being a "good franchisor," making... read more
Key strategies to accelerate franchise growth for startup and emerging franchisors In this webinar, franchise attorney Charles Internicola and Nick Powills, founder of No Limit Agency and 1851 Franchise, discuss key strategies to accelerate franchise growth through PR and digital media. Some topics include: Steps franchisors should take when it... read more
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.