Wow! You’ve settled on a franchise investment! 

You’ve done everything on your own. You were diligent and did your own research, and you looked at all of the available options. Now you’re sure that you landed on the perfect franchise for your company. 

It’s all going to be perfect, right? Not so fast…

Lawyer Up for Protection

You’ve reached a new step by selecting a franchise for investment of money and time, and that is very exciting. But, hold on a second. Before you sign on the dotted line, pause and take a moment. 

Do you really know all that you need to know to do this without proper advice? 

With a franchise, it is so important to consult with a lawyer. Lawyers can advise you to make sure that you actually understand what you are agreeing to. Remember, the franchise agreements will obligate you for between 5 and 15 years, depending on the Franchisor’s term requirements. So, understand now the terms you will have to live with and, hopefully,  prosper under for years.

Franchise attorneys understand the ins and outs of franchise laws and can help you to understand what to expect. A franchise is a big investment, and just like any large investment, you need to call in the experts. Be cautious and make sure that you know all of the details before you are locked into something you may regret.

Proper Review of Franchise Documents

The franchise agreement is a legally binding document. It, together with the Franchise Disclosure Document, is filled to the brim with important details that you must review properly and understand.

A franchise attorney can make sure that you do not miss any important details. After all, a franchise attorney has the experience necessary to interpret all the heavy language in a document – you want to have that experience at your side as you weed through what information is included in a Franchise Disclosure Document. 

A franchise lawyer consultation is worth every penny and may save you major headaches and expenses in franchise litigation later on. 

What Is a Franchise Lawyer?

A franchise lawyer is an attorney that focuses on cases involving entrepreneurs and franchising issues. They focus on the legal requirements to start a franchise properly. They can provide proper counsel for your business needs, to help you interpret business laws that are specific to franchising.

The legal advice you’ll receive from a franchise lawyer is experienced based on decades of past matters with franchisors and franchisees. They know the particulars of Franchise Disclosure Documents and franchise agreements.

This knowledge will ensure that your interests are safeguarded. They’ll help you to negotiate terms that suit your interests and your unique situation best, and give you guidance and clarification of laws – which is invaluable.

What a Franchise Lawyer Does

A franchise lawyer can help their clients negotiate specific franchise terms.

Specific negotiations a franchise lawyer accomplishes:

  • Terms of non-compete: Legal documents need to not only consider your present situation, they must also consider all possible future situations. A franchise lawyer can help protect you in case you may decide later down the road to launch another business, close or sell your franchise, etc. Your franchise lawyer can make sure that the terms of franchise contract are not unreasonable.
  • Territory protection: Your franchise lawyer can protect your territory, by enforcing the terms of the Franchise Agreement. This allows you to attract as many customers as possible, and will in turn increase your overall profit. 
  • Royalty payment structure and clarification: Royalty payments and franchisee rights can be extremely complex. Lawyers for franchisees assist you in understanding your obligations as franchisees and of the franchisor’s responsibilities, as well.
  • Litigation limitations: Sometimes disputes can arise among the franchisee and franchisor. You may find that you want or need to pursue remedies to solve any issues that arise under the contract. Most often the franchise agreements contain dispute resolution timeframes (deadlines). A dispute involving potential mediation, arbitration and/or lawsuit requires the franchisee to consider the proper timing during which you will be required to assert specific claims. The ability to properly file a claim is usually a time-sensitive issue (the “statute of limitations” could run out), so legal advice is needed to properly advise you of these terms for your own protection later on.
  • Closing rights with ending terms protected: Closing rights are necessary in case your company experiences losses or such that might require a closing. A franchise lawyer can protect your interests in negotiations while asserting appropriate state and federal franchise laws.
  • Protection of future sale: A franchise lawyer is able to represent you in the event you decide to sell or need to sell. 

Sign on the Dotted Line

How does a franchise agreement work?

A franchise agreement is a contract under which the franchisor grants the franchisee the right to operate a business and use its brand (intellectual property). This includes the right to sell, or distribute goods or services associated with their brand.

A franchise attorney will review all terms with you before anything is signed, keeping your best interest at heart. Your needs and goals must be protected before you sign. 

Understanding all agreement terms is critical, and the goal of your franchise attorney is to make sure that all agreements are clear to you prior to locking anything in. 

On top of this, your franchise lawyer is needed for a proper and complete review of all FDD disclosures and to confirm that Federal Trade Commission regulations and rules are followed. A franchisor must provide to you the FDD prior to your first meeting, and no initial franchise fee can be charged until at least ten (10) days (note, some jurisdictions may require a longer time period) following delivery to you of the FDD.

First, review all provided documents on your own. Be ready to ask questions of your attorney – remember they are there for you. Express any unique concerns that you may have. Your franchise lawyer will clear up any confusion before negotiations start, and throughout the entire process. 

Choosing the Right Franchise Attorney for You

There are many franchise attorneys available for franchise legal advice. Research and look at their experience. It’s important that you feel comfortable with your lawyer-client relationship, and that communication is free-flowing and clear. 

A solid franchise lawyer is one of the most important investments that you and your company may ever make. Risk is reduced and you will find that it is well worth your time and expense. This important due diligence step will ensure that you have a fair and proper franchise agreement which suits you best for success in your chosen franchise business.

Reach out! We at Kilcommons Law are here to assist you with reviewing your franchise documents, assisting you in the acquisition of an existing franchise unit, or sale of your franchise unit. Additionally, the firm is available to assist you in disputes with a franchise system, including mediation, arbitration or litigation. 

Let Kilcommons Law advocate for you.

© Kilcommons Law, P.C. 2023