What Legal Considerations Should I Think About Before Buying a Franchise?
If you are thinking about purchasing a franchise, congratulations! This is a very exciting time and you are right to spend a little time reading online before taking the plunge on such a huge investment. When it comes to being a business owner, purchasing a franchise allows you a fair amount of autonomy, but still provides a great deal more support. While this may work great for some business owners, others may find it too limiting to allow them to realize their vision.
Before you purchase a franchise just because you believe the brand is profitable, there are some things you’ll want to consider more fully. There are both pros and cons of owning a franchise and unless you understand both, you’ll not truly be making an informed decision. The results of this could mean that your business is a failure, or worse – that your business fails to fulfill your dream for business ownership.
Step one is, of course, researching the particular company you are considering entering in to a franchise agreement with. This includes evaluating their support system and past track record with franchise owners. Beyond this you’ll want to consider some legal aspects of franchise ownership you may not have thought about.
Legal Considerations of Franchise Ownership
One thing to caution you about right away – some franchise developers will claim that you don’t need an attorney to negotiate with them. They may also claim that there is no room for negotiation. The reality is a little more complex than that. In any franchise negotiation, there is always a question you can ask that will open up the agreement to negotiation.
So, don’t accept the claim you don’t need an attorney at face value. Their job is to help you identify the questions to ask to shift the power in the negotiation process. What’s more, they can point out several other issues and legal considerations you may not be aware of or misunderstood in order to give you a better position at the negotiating table.
Your Financial Agreement and FDD
These agreements can be some of the most complex and lengthy stuff you have to read during your career as a business owner. Unfortunately, it’s also one of the most important aspects of knowing what you are walking in to. When it comes down to it, do you want your lack of experience in these documents or the stress of trying to negotiate this on your own to cause you to make a mistake that will come back to haunt you countless times over the life over your business?
Hiring an attorney to help guide you through the complexities of the negotiation process and legal issues surrounding franchise ownership is one of the best decisions you can make. It can save you time, money, and heartache in the long run while giving your business a much better shot at navigating the hard times.
Franchising can be fun and a great way to enter the world of business ownership. But don’t mistake the support offered by the franchise seller as a replacement for your own personal business attorney. Before you buy a franchise, call Stephen Rizzieri at 214.434.1017 or fill out the form on our law firm site.