I Wish I Hired a Franchise Lawyer When I Bought the Franchise

In the 34 years of representing buyers and sellers of franchise, I have nearly seen it all.  I feel like an emergency room physician when I meet a client who bought a franchise and has lost hundreds of thousands of dollars in a failed or failed business.  The franchisor is threatening termination and a suit for lost profits against them personally, there are in breach of their lease and their lease guaranty, and their SBA loan secured by their home is in default.

As part of my analysis of their rights and obligations, 2 of my initial questions are: “Where you represented by an attorney? (There may be a claim for malpractice.)  And, did you hire an accountant to help you set of the business and prepare a financial forecast?  More often than not the answer is no.

The usual reasons for failing to retain a franchise attorney and an accountant are:

1. I didn’t want to spend the money – being penny wise and thousands of dollars foolish.

2. The franchisor’s sale representative saying that it is not necessary and a waste of money as the franchisor will not negotiate the terms iof the franchise agreement.

3. I know what do myself.  His or her assumption that the purchase of a franchise is like buying a car.

I am sure the entire readership of BlueMauMau would appreciate if readers share by posting their bad experiences, why they did not hire a lawyer or an accountant and what they would do now if they could go back and do it all over again.