The attorneys at Spadea Lignana have been reviewing and negotiating franchise agreements on behalf of franchisees for decades. Franchisors must comply with both federal and state regulations and provide potential franchisees a Franchise Disclosure Document (the FDD) that gives the candidate specific information about the business offering, the contract provisions and the background of the franchisor. The document can be an invaluable resource in a candidate’s due diligence, but it can also be a burden to read and understand for those unfamiliar with franchising or looking at an FDD for the first time.
At the end of the day, the Franchise Agreement is what a candidate will sign and what will govern the relationship between the franchisee and the franchisor. It is imperative that franchisees understand their role and their obligations to the franchisor. Our role is not to tell prospective franchisees whether it is a good business idea or not, that is for them to decide. Our role is to help them understand the fine print, and if appropriate, ask for concessions through a negotiated addendum to the franchise agreement. Every agreement, system and situation is different. We tailor our representation to the needs and goals of each client.
After we have been engaged, our first step is a thorough review of the FDD and the Franchise Agreement. We will give our clients written comments on our findings. The second step is a conference call to discuss our findings, to identify any outstanding issues and to develop a game plan to discuss any issues with the franchisor. The third and final step is for us to negotiate the remaining issues with the franchisor and to prepare a signature ready final version of the addendum. The entire process typically takes a week to ten days to complete.
In most instances, we offer a flat fee to clients for the review of the FDD & Franchise Agreement. Call 215-525-1165 for more information and to speak to one of our attorneys.