Whether you’re looking to buy a franchise or wanting to franchise your own business, a good franchise attorney is absolutely essential. Here’s why.
The All-Important Franchise Disclosure Document (FDD)
Probably more than any other factor, the FDD will determine your success or failure as a franchisor or franchisee. If you’re looking to buy a franchise, you’ll need to read through this document, which can be hundreds of pages long. A good franchise attorney is very familiar with these lengthy documents and is on top of the latest changes in franchise laws. He or she will know what to look for and can spot any red flags. In addition to the FDD, your attorney should review any legal documents that you’re required to sign, such as the franchise agreement. He or she can also help you set up your business as a legal entity in a fashion that makes the most sense when considering legal issues, taxes and liability. For more advice on buying a franchise, check out this guide by the Federal Trade Commission.
As a franchisor, a good franchise attorney will ensure your FDD complies with federal and state regulations. Your attorney can also assist you with other business-related legal needs, from contracts to employment law. It’s important to note that while a good franchise attorney should provide legal counsel, they are not experts on the operational side of franchising. Critical decisions like franchise fees and royalties that go in the FDD can make or break you, so it’s better to work with a qualified franchise development company. Learn more about how making the wrong decisions early on can cost you millions of dollars in the long run.
Choose and Spend Wisely
The last thing you want is to choose an attorney who claims to be a franchise expert, but is not. And that’s another reason why it’s wise to work with a franchise development company – they can refer you to a good franchise attorney. Once you find the right attorney, make sure you have your ducks in a row before he or she begins work. Otherwise, you may waste money on legal fees for a franchise opportunity that doesn’t pan out.