What You Need to Know Before Signing a Franchise Agreement
If you are about to sign a franchise agreement, about to pay money to a franchisor or you are about to a franchise discovery day there are a few things you should know throughout this exciting process. Your primary step before you sign a franchise agreement is conducting due diligence. Let's take a look at what I mean by due diligence. When conducting due diligence you should be investigating what legal documents you are signing and what agreements you are committing yourself to when you become a franchisee. Your primary tool and vehicle for conducting due diligence is the franchise disclosure document (FDD) which must be provided to you 14 days before you sign a franchise agreement or before you pay any money to the franchisor.
You will need to speak to your franchise attorney about the following issues:
- Upfront franchise fee;
- Monthly recurring fees; and
- Satisfaction of existing franchisees.
I discuss these issues and more in my book "The Entrepreneurs Guide to Purchasing a Business or Franchise". Request a complimentary copy of the book by filling out the request form or by calling us directly at 1.800.976.4904.
- Take Your Business from Local Success to National Franchise with The 90 Day Franchise Launch Program
- An Entrepreneurs Guide to Purchasing a Business or Franchise
- ENDWISE: The Guide to Selling Your Business with Peace of Mind
- The New York and New Jersey Partnership Dispute Guide
- Franchise Counsel Program