Starting a franchise can be an exciting way to run your own business and benefit from the backing of a well-established brand. However, before you commit, there’s one person you want in your corner: a franchise lawyer. A good franchise lawyer can thoroughly review your contract, protecting your investment and helping you avoid legal trouble.
What Does a Franchise Attorney Do?
A franchise attorney is your go-to person if you’re dealing with franchise procedures. Regardless of whether you’re just starting or expanding rapidly, these lawyers ensure everything’s fair, clearly outlining what you can and can’t do. They are familiar with all the franchise laws, both local and national, and they explain those complex legal terms in a way that anyone can understand.
What franchise attorney is mainly in charge of:
- Review franchise contracts
- Explain what the law says you can and can’t do.
- Give advice on fees, how to renew, and the territorial restrictions.
- confirming the accuracy and compliance of the franchise disclosure document (FDD)
- assisting in the settlement of conflicts with franchisors
The Importance of Reviewing a Franchise Agreement
A franchise agreement is a legally binding contract between the brand owner (the franchisor) and you (the franchisee). It spells out all the details, such as the duration of the agreement and the amount of royalties you will pay. Because these agreements often favor the franchisor, it’s essential to have an advisor review the terms before you sign anything.
When attorneys review franchise agreements, they review your documents. Here’s what they’ll focus on:
- Fees and Payments: What are the initial costs, royalties, marketing fund, and any recurring payments?
- Territory Rights: Does the contract say you’re the only one who can do business in a specific area? Can the franchisor open other locations nearby that might hurt your business?
- Support and Training: How much help and training do they give you as a franchisee?
- Termination and Exit Clauses: Under what conditions can the franchisor terminate our deal? What happens if I want to transfer or sell my franchise?
- Performance Expectations: Do you have sales goals you need to meet?
When people are eager to buy a franchise, they often skip getting an attorney to review the franchise agreement before signing. This can lead to financial difficulties in the future. A franchise lawyer can help you understand the contract. They might even be able to negotiate a better deal for you, if possible.
When to Contact a Franchise Attorney
Thinking about buying a franchise? It’s a good idea to talk to a franchise lawyer before committing to a long-term arrangement. Getting a franchise attorney involved early lets you:
- Determine if the franchise fits with your objectives.
- Recognize any warning signs in the FDD, or franchise disclosure document.
- Make the most of the process of negotiating
Conclusion
Going into a franchise can be easier than starting from scratch, but only if you know what you’re signing up for. A franchise lawyer is your best bet against hidden costs or a raw deal. Don’t sign anything before a lawyer has reviewed it. Obtaining legal advice is essential if you want a smooth start.
Featured Image Source: https://pixabay.com/photos/gavel-auction-law-hammer-symbol-2492011/
