is it necessary to hire a lawyer when contemplating the purchase of a franchise? why or why not?

The answer to this question would definitely be a big yes, irrespective of whether you are the franchisor or the franchisee. The truth is that you will need to hire a franchise attorney even before the very first contract is drafted and signed by both parties. Royalty Free Photo

Full Answer

Why do I need a lawyer to open a franchise franchise?

Franchise lawyers may also be able to help you negotiate the terms of your agreement and offer guidance on which aspects of the agreement are vague, requiring additional clarification from the franchisor.

What happens when a franchisee wants to sell a franchise?

Right of first refusal: If a franchisee decides to sell a franchise unit, the franchisor has the option of buying it back themselves or allowing a new owner to buy it and take over operations. In some cases, the franchisee is tasked with finding a new buyer, which the franchisor then needs to approve before final sale.

What kind of lawyer do I need to become a franchisor?

In the majority of cases, it is best to work with an attorney focused on franchising. While general business lawyers will be able to provide counsel regarding business law, franchise specific lawyers will be able to offer very specialized advice based on their past experience dealing with other franchisors and franchisees.

What is the difference between general business lawyers and franchise lawyers?

While general business lawyers will be able to provide counsel regarding business law, franchise specific lawyers will be able to offer very specialized advice based on their past experience dealing with other franchisors and franchisees.

What you really need to look for when considering a franchise?

Before choosing a franchise, take the time to consider these 10 vital signs that the company is the right fit for you.Proven sales record. ... Growing market. ... Competition. ... Repeat business. ... Healthy living. ... Upsell opportunities. ... Profitable business model. ... Personal interest.More items...

Is it extremely beneficial working with a franchise attorney why why not?

Hiring a franchise attorney is important because, when it comes down to it, their real job is to protect you. It's one thing for them to explain the legal documents in franchising. It's quite another to advise you. A good franchise attorney will offer his or opinion on the feasibility of your potential new venture.

What are the legal concerns one must be aware of when considering a franchise?

Contractual Obligations to buying a franchiseFranchisor, franchise system, and the agreements a franchisee is required to sign.Key company staff.Management's experience in franchise management.Financial statements.Bankruptcy filings and litigation involving franchisor.Type of training franchise offers.More items...•

Who is responsible for decision making in a franchise?

Even though the franchisor must give serious consideration to recommendations and input of its franchisees, the franchisor is the one solely responsible for making the final decisions.

What is the purpose of franchise lawyer?

They can help you negotiate with a franchisor by explaining what changes the franchisor might be willing to make and which ones will likely be rejected. An attorney with franchise experience can also assist you in evaluating the franchise opportunity and writing your own business plan.

What are the benefits of hiring the services of a franchise lawyer or a franchise consultant?

​Benefits of a franchise consultantConfirming "franchisability"Franchise gap analysis.Franchise strategy and offering.Franchise system growth strategies and franchise sales support.Franchise sales compliance training and franchise sales staff recruitment.Operations manuals and training programs for franchisees.

Why do we need to seek advice from a lawyer and accountant concerning the franchisor FDD and Franchise Agreement?

All FDDs and Franchise Agreements are one-sided in the franchisor's favor, however, an experienced franchise attorney can help guide you through convoluted language, point out vague verbiage that needs further clarification from the franchisor, and possibly help you negotiate the terms of your agreement—all before you ...

What is franchise law consideration?

Our law defines cause or consideration as the prestation or promise of a thing or service by the other. In a Franchise Agreement, the cause or consideration involves the “why?” in the agreement. Why will the franchisor franchise his business?

What are the legal issues on franchising in the Philippines?

There are no specific laws governing franchising in the Philippines. Franchise agreements are regulated by the applicable provisions of the: Intellectual Property Code (IPC).

Can franchises make their own decisions?

Franchise owners enjoy the freedom to make a lot of independent decisions, enjoying constant support from the franchise. Owners can make their own choices, with a touch of guidance from experts who are familiar with the success mantra.

Why would someone choose to start a franchise business?

Franchising allows bigger businesses to branch out and grow while giving people the opportunity to run their own business with the help and support of a larger company that has a proven formula for success.

What is the role of the franchisor when a franchise is purchased?

The franchisor grants the franchisee the right to operate the business under the franchise system's trademarks and service marks and enforces the brand standards of the system. Great franchisors provide training to new franchisees and their management, and also provide support in the training of the franchisee's staff.

Do You Need To Hire A Franchise Lawyer?

In this case, my answer is a resounding “ yes .” And please don’t think that my ‘yes’ is because this is a post that’s paid for by a franchise lawyer. Far from it. That’s not how I roll.

3 Reasons Why You Need To Hire A Franchise Lawyer

What follows are 3 reasons why it’s crucial for you to hire a franchise attorney .

Who Gave You That Advice?

Hold on! Who “ told ” you that? I want a name and a phone number. Kidding.

What Can a Franchise Lawyer Do for You?

First and foremost, a franchise lawyer will have your best interest in mind; it’s what you pay them the big bucks for (we’ll get to cost further down the blog).

What Can a Franchise Attorney Help Negotiate?

Not everything is negotiable, but there are a few items a franchise attorney may be able to help you with, including the following:

How Much Does a Franchise Lawyer Cost?

We all know legal advice isn’t cheap. Thankfully, many franchise attorneys are sole practitioners or work for boutique firms. That means they often cost less than other lawyers. It’s not uncommon for a franchise attorney to charge a flat rate for select services like reviewing an FDD or Franchise Agreement.

What is the value of hiring a franchise attorney?

If you are considering the purchase of a franchise, what is the value in hiring a franchise attorney? Purchasing a franchise is an extensive, and sometimes overwhelming, process that covers business, financial and legal issues. Since a franchise is typically a significant investment and long-term commitment, you are well advised to work with professional advisors along the way. So why should you hire a franchise attorney?

What is a franchise disclosure document?

By law, franchisors are required to prepare and deliver to you a Franchise Disclosure Document, a legal document containing disclosures mandated by federal and state franchise laws. Franchise disclosure laws were passed for the protection of prospective purchasers of franchises to make sure there were given information important to the decision of whether to purchase a franchise. One exhibit in the Franchise Disclosure Document is the Franchise Agreement, which is the binding contract between the franchisor and the franchisee.

Why is it important to hire a franchise attorney?

Hiring a franchise attorney is important because, when it comes down to it, their real job is to protect you. It’s one thing for them to explain the legal documents in franchising. It’s quite another to advise you. A good franchise attorney will offer his or opinion on the feasibility of your potential new venture.

Why do franchisees need a franchise attorney?

Because franchisees buying into a system will want the unrestricted right to use the name and mark used by the system, a franchise attorney will work with the franchisor to obtain federal registration of a trademark.”.

What is FDD in franchising?

In case you didn’t know, the FDD is what all prospective franchise owners receive well before they actually buy the franchise they’re interested in. By law, the FDD contains 23 specific items about the franchisor. Some of them include: Identity and Business Experience of Key Persons. Litigation History.

What states have franchise laws?

Some states even have separate rules and regulations. They are known as “Regulation States. In alphabetical order, they are: California.

How to find a franchise attorney?

Here are three online resources that you can use to help find a franchise attorney: 1 The American Association of Franchisees & Dealers (AAFD) lists several franchise attorneys on their website. 2 The LawInfo website lists franchise attorneys by state. 3 FindLaw lists franchise attorneys by state and city.

Is a franchise attorney a good advisor?

They’ve also seen their clients fail. Having a trusted advisor in your corner can greatly improve your chances for success as the owner of a franchise business. A good franchise attorney can be that trusted advisor – and more.

Why do you need an attorney when selling a house?

You’re the heir or executor of a property whose owner is now deceased. You’re selling a house with an uncooperative partner. You have judgments or liens on the property.

Why do I need a real estate attorney?

Reasons to hire a real estate attorney even if it’s optional 1 You’re an out-of-town buyer. 2 You’re buying a property that is a short sale or bank-owned. 3 You’re buying a property that is part of an estate sale. 4 You’re buying a commercial property. 5 You’re buying a property that could potentially have some structural issues. 6 You’re buying a property in a problematic area such as a flood zone or areas with adverse conditions (tornado-prone, radon, toxicity levels, etc.).

The FDD

Preparing and Drafting The FDD

Reviewing The FDD

Understanding The Franchise Law

• The attorneys at firmslike Larkin Hoffman exclusively specialize in US franchise law, and cater to the franchising needs of theirclients, making the entire process of preparing, drafting, interpreting and explainingeverything related to the complicated FDD a faster and easier process for bothparties. As should be obvious,depending on whether you ar...

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