As a prospective franchise owner, there are many ways the services of an expert franchise lawyer can benefit you when starting your new business.
In this article, we will discuss three important things a competent franchise attorney can do for you and your business in general. Let’s dive right in.
Who is a franchise lawyer?
A franchise lawyer, also called a franchise attorney, is basically a lawyer who knows the ins and outs of the franchising world.
A good franchise lawyer is one that’s actively involved in the franchise industry and keeps up with the latest changes and updates regarding franchise law. Also, nearly all franchise attorneys represent would-be franchisees, existing franchisees, and franchisors.
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Before we dive into what a competent franchise attorney can assist you with, we would like to discuss what some franchise sales representatives may tell you when buying a franchise: “You don’t really hire a franchise lawyer since no parts of our franchise agreement are negotiable.”
This is what we have to say:
Your decision to hire a lawyer is not about whether or not the franchise agreement is negotiable. It is about you having a complete understanding of what is written in the agreement and ensuring that your attorney checks the document for any warning signs. Whether or not a franchise agreement can be negotiated usually depends on the circumstances, but we won’t go into that.
The takeaway? Bear in mind that the primary role of your franchise lawyer is to ensure your interests and rights are protected.
3 Things Your Franchise Lawyer Can Assist You With
Here are three important things a franchise lawyer can do when purchasing a franchise:
1. Go through the franchise agreements/franchise disclosure documents (FDD)
Although we implore you to read through every franchise document yourself, it would be better to have someone who is used to reading FDD do that for you. And a franchise attorney can help with that.
Not only do franchise lawyers get to read many franchise disclosure documents, but many of them also help draft these documents. So, a skilled franchise attorney already knows what to check for in the FDD.
In summary, when you seek the services of a franchise attorney, you should expect to receive their view regarding the franchise agreement and the FFD. You will also get specific guidance and counsel based on your particular situation.
2. Determine the best business structure for your franchise
As we’ve mentioned earlier, the primary responsibility of a franchise lawyer is to protect your interests.
And one good way they ensure that is by providing necessary advice and counsel regarding the right business entity for your franchise. For example, they will educate you on the best setup for your business, whether it is a corporation, sole proprietorship, S-corporation, or Limited Liability Company (LLC).
Choosing the right entity for your franchise can help protect you and your interests in case any legal issues arise while running the business.
3. Help negotiate your commercial lease
Commercial leases are pretty complex documents and tend to favor the landlord.
Considering that and the fact that a commercial lease is a financial (and legal) obligation that lasts for many years, it’s important that you completely understand your obligations under the lease. A franchise lawyer who is experienced in commercial leases can guide you through the lease and help you get better terms (if possible).
As we have stated, a competent franchise lawyer can offer the guidance and counsel needed to secure your future when buying a franchise business.
One more reason to hire a franchise attorney when purchasing a franchise: we cannot think of any reason why you should not.
