Why Do I Need a Franchise Attorney?
Entrepreneurs enter into franchise agreements for many different reasons. The prospect of owning a self-sustaining business while obtaining opening and ongoing support from the franchisor is one primary reason.
Franchisees already sacrifice a large segment of their time and money toward the profit of their business, adding contract review and legal analysis duties on top of it is a huge burden to bear. The dream of operating a profitable business isn’t easily achieved.
That’s why Dady Gardner’s experienced team of franchise lawyers is here — to help franchisees, dealers, distributors, and other small business owners preserve and enhance the value and management of their businesses.
But what do franchise attorneys do exactly?
A franchise attorney can assist prospective business owners navigate preliminary processes necessary for starting a franchise operation, such as reviewing and commenting on Franchise Disclosure Documents (FDDs) provided to the prospective franchisee by potential franchisor candidates.
The FDD contains 23 informational items designed to educate a prospective franchisee on the franchisor, their system of operation, and whether the program agreement offered is well established and generally profitable or whether it is unproven and risky. The FDD will describe:
- The level of experience of your franchisor
- The obligations of the franchise company, both prior to and after the opening of your business;
- Initial fees and continuing fees (such as royalties and advertising) you will be required to pay;
- What, if any, financing arrangements are provided;
- A description of many of the startup costs incurred in the initial investment prior to and after opening the business;
The Dady & Gardner team of experienced franchise law attorneys will evaluate the disclosure made in your FDD and the terms of your proposed franchise agreement (also contained in the FDD before you make a final decision to sign up as a franchisee.
While franchise agreements tend to strongly favor the franchisor, even after they are fully negotiated by an attorney, some franchise agreements are particularly unfair and one-sided, and franchisors are generally willing to review and negotiate certain terms, particularly if they do not go to the “core” of the franchisor’s system or endanger its trademarks. Dady & Gardner will identify the particularly egregious or unfair terms and suggest negotiating better terms.
In addition, a franchise lawyer is an invaluable asset for business concerns that may arise after you sign up and that continue to arise during your franchise operation. Business owners that lack franchising representation will often hesitate to resolve issues, allowing for problems to persist, and effectively lose leverage against their franchisor, due to either contractual limitations periods or state statute of limitations. In what can only be described as a worst case scenario, existing franchisees often take their legal advice from their franchisors! Imagine having a personal injury matter and calling up the insurance company’s counsel to ask what to do! Imagine coaching a basketball team and asking your opposing coach what play you should run at the end of a close game. While no one would do either of those things, many franchisees willingly accept legal advice from their franchisor, even when the franchisor’s legal position is directly adverse to the interests of the franchisee. Do not take legal advice from your franchisor – hire your own attorney at Dady & Gardner whose job is to look out for you!
Entrusting your franchise counseling and franchise litigation matters to Dady & Gardner allows you to protect your legal rights and allows you the freedom to focus on the aspect of your business that you are an expert in – actually running your business.