Importance of Experienced Franchise Counsel

Why is it important to have experienced franchise counsel review a potential franchisee’s franchise documents prior to investing in a franchise? Even if the documents are not negotiable (which many mature franchises are not) an experienced franchise attorney such as myself, can help to evaluate the investment, educate the client on the obligations that he/she has to the franchisor and the obligations that the franchisor has to the franchisee, alert the client of any potential concerns and address the client’s concerns. Often we find that our clients have concerns that, when discussed with us, are resolved easily allowing the client to continue moving forward with the investment. We view ourselves as educators in the process. When a franchise is not mature, the risks are greater and our role is stronger. With a newer franchise, we suggest greater due diligence (validation) by the client. We explain the risks and also explain that it is their responsibility to weigh the risks versus the potential benefits. It is not our role to be a deal breaker. With a newer franchise we would expect the franchisor to be willing to negotiate the franchise agreement terms more readily.

Posted In: Franchising
Tagged In: