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If You’re Buying a Franchise Having the Right Attorney is Crucial


Be sure to use a franchise attorney if you’re going to buy a franchise. Here are the reasons why you shouldn’t go it alone or use any attorney.

Purchasing a franchise is an important decision. People will use their live savings, a home equity loan or obtain money from family members to fund the franchise. Despite the success of franchising there are risks. The Franchise Disclosure Document (“FDD”) and franchise agreement include a number of documents such as a personal guaranty and non-compete.

Many of the provisions in today’s franchise agreements are based upon previous franchise litigation and judicial decisions. In addition, franchisors conduct their business over a large geographic area which encourages a franchise agreement that favors the franchisor.

Since most attorneys focus on different areas of the law, it’s important that franchisees use an attorney that fully understands franchise law.

There is a great deal of franchise information on the Internet and this information can be used to gain a fundamental understanding of franchising but it can’t take the place of a franchise attorney. Every day individuals will purchase a franchise without using a franchise counsel, despite the advice and urgings from franchise experts and industry associations.

The Reasons for Using a Franchise Attorney:

  • Franchise law is complex and requires an expertise that a non-franchise attorney may not have.
  • A franchise attorney knows the warning signs to look for in the FDD.
  • There are particular provisions in franchise agreements that are unique.
  • A franchise attorney will know what sections in the franchise agreement to focus on.
  • Compared to other attorneys a franchise attorney has the experience and is more qualified to negotiate changes to your franchise agreement.
  • You can protect yourself from future problems.
  • Since franchisors are represented by franchise attorneys you want your attorney to speak the same language.
  • The cost of a franchise attorney will represent a small portion of your total franchise investment.

Before you sign the franchise agreement, pay the franchise fee and make the commitment to your new franchise business, be sure that a franchise attorney is guiding you. It’s an investment you need to make.

© 2013 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com


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