When Should You Hire a Franchise Attorney?
Do you need to hire a franchise attorney? Yes.
When should you hire one? The simple answer is before you invest in a franchise. Researching potential franchises and finally deciding upon one is an exciting time, and it can be easy to forego the check-in with your lawyer.
However, it’s important to get their input before signing on the dotted line.
Why You Need to Hire a Franchise Attorney ASAP
Everyone involved in a franchise should seek legal counsel. Here are the main reasons for hiring a franchise attorney:
Support in Navigating the Franchise Disclosure Document (FDD)
The FDD is a nearly 200-page document outlining everything the Federal Trade Commission deems necessary for the franchisee to know.
Both the franchisee and franchisor benefit from having an intimate knowledge of the contents of this document.
The franchisee benefits because they’ll be aware of obligations they must adhere to once they sign the franchise contract. If they don’t abide by those requirements, the agreement can be terminated.
The franchisor benefits because they have a way to protect their brand from franchisees who don’t abide by their standards of operation, including cleanliness and safety standards.
Due to the complexity of the FDD, having an attorney guide you through either providing the information or interpreting it will be helpful.
Guidance on Choosing a Franchise Business Entity
Another reason to hire a franchise attorney is that they can help you choose the best franchise business entity, such as:
- Limited Liability Company (LLC)
- S corporation (S subchapter)
- C corporation
Choosing the right entity will determine:
- Your rights
- Your liabilities
- How your business will be taxed
Assistance If the Business/Relationship Doesn’t Work
No one wants to think about the possibility of their business not working out. However, there’s always a possibility that something can get in the way of its success, including:
- A change in personal circumstances
- The franchise not being the right fit for you or vice versa
- The business failing due to poor location
- Not making as much money as you anticipated
- Having higher business expenses than you can afford
- The purchasing/selling agreement was made upon false information
If you need to prematurely terminate the franchise agreement or end up in court, having a franchise attorney on your side is essential.
How to Find the Best Attorney for Your Needs
One of the best ways to find a great franchise attorney is to ask for a referral. You can ask other franchisees of the franchise you want to invest in for the names of an attorney or attorneys they’ve used. You can also look online to evaluate reviews and client testimonials.
Finding a qualified franchise attorney is imperative to your business. Make sure you choose one that has the reputation for working hard to protect the interests of their clients.
Are you ready to hire a franchise attorney? Contact us today for a free consultation.