Why Have A Franchise Agreement Professionally Reviewed?
When deciding to embark on opening your business, you have many options. One of the options available to you is to go the route of buying a franchise among the many franchises in existence. However, when considering a franchise, there are some legal considerations you should take in account when deciding to go this route. First, franchisors (those who own the franchise system) will require you to follow their rules and policies. These policies encompass a part of the Master Franchise agreement and Franchise Disclosure Document. Both of these documents will be given to you for your review prior to purchasing a franchise.
Bear in mind, the Master Franchise agreement and Franchise Disclosure Document can often look intimidating considering their length and various sections. A Master Franchise agreement contains many clauses that generally favor the franchisor such as royalties and limitations on advertising. Many of these protections are done to protect the franchise system; however, they can result in further investment and hassle to an individual looking to purchase such a franchise depending on the terms and conditions set forth (i.e. requirements for improving the leased premises). However, it is important to note the Franchise disclosure document contains the full disclosure of the company including its financials and any pending litigation. Regardless, it is imperative to have an attorney review the Master Franchise agreement and Franchise Disclosure Document carefully. While the entire agreement requires a careful review, some items that should be given close attention by an attorney in the Master Franchise agreement include the length of the franchise term, the territory, and royalties.
Benefits of having an attorney involved when reviewing a Franchise Agreement
- Attorneys are knowledgeable regarding franchise law.
- Can analyze the disclosure document to alert the client to any legal pitfalls.
- Can negotiate with franchisor regarding the agreement’s terms and conditions.
How long does it take to review a Franchise Agreement?
Approximately 2-5 business days (depending on specifications).
Why is important to have a Franchise Agreement professionally reviewed?
Every person in the beginning stages of evaluating a franchise should consider contacting an attorney. Reason being, attorneys have an intricate knowledge of the law and can spot problematic issues within the Master Franchise agreement and Franchise Disclosure Document. Though, it is recommended you select attorneys with both knowledge of the law and business as they can better analyze the financial position of the franchise to provide you a better picture of the business.
Here at SG Law Group, we have attorneys with knowledge of both the law and business. The attorneys at SG Law Group can make sure that the potential franchise purchaser understands every obligation and areas of concern in order to come to an informed decision regarding the franchise.
Hire an affordable, professional Attorney to draft all the franchise documents for your business Today! and Hire an affordable, professional Attorney to review all the franchise documents Before You Sign!