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Franchise Attorney Services
Franchise attorneys may work exclusively with franchisees, exclusively with franchisors, or with both. A quick check of their website before you call should give you that information.
Attorney services can enhance and preserve a business, and do not necessarily involve litigation.
Franchisees, dealers and licensees can guard against missteps at the beginning of a franchise relationship by having a franchise lawyer evaluate their franchise agreement prior to signing. The attorney's specialized knowledge and years of experience can be a great help in a buyer's due diligence. Franchisees, dealers and licensees can protect, preserve and enhance the value of their businesses through such legal assistance as negotiation, mediation and franchise agreement revision. An attorney may serve as legal counsel for associations and help with legislative initiatives. He or she can negotiate to avoid litigation and arbitration, saving the client money and time, but also take up litigation or arbitation should they become necessary.
When to Consult a Franchise Attorney
Before you sign the franchise agreement
Get an expert to help you with your due diligence before you commit yourself to a franchisor. This is crucial. Do not “do It yourself” or count on friends and relatives to help you out. At this time you need an expert who specializes in bringing franchisees through this critical period. Skimping on this to save on attorney fees can work out quite badly when hundreds of thousands or even millions of dollars are on the line, both now or in the future. Your attorney may also be able to help you negotiate more favorable terms.
However experienced your family lawyer may be in other matters and however ably they may have served you in the past, it will be wise on your part to obtain the services of a specialist in franchise law.
Some comments from Blue MauMau readers:
By Guest, 2009-02-07
Franchises, Small Business & lawyers
I'm a business transactions lawyer who has done a lot of commercial lending and finance work. I can tell you that many franchisees and small business owners nickel and dime themselves into bankruptcy. They listen to franchisors, lending officers, SBA Brokers, SBA BDOs, friends and others when conducting their due diligence. Most often, they are advised to take the cheap route and avoid legal fees at all costs. That advice is most often to the franchisee and small business owner's detriment. The other problem is that some franchisees/Small Bus Owners fail to do any due diligence on their lawyer to see if he/she has the requisite experience to handle franchisee/small business due diligence issues. Believe me, there are usually a lot of folks who stand to make money from the franchisee's decision who don't want a close examination of the deal.
By Guest, 2009-02-13
if you're planning to invest money in any franchise. Your lawyer works for you and he/she will give you the knowledge you need to make the right decision and will tell you EXACTLY what your obligations are based on the contract. I'm not a lawyer, just someone who decided to take the "cheap" way out because the explanations all sounded fair and reasonable. I learned my lesson during the period leading up to the decision to close — when I realized they all had me by the short hairs. Each of those now creditors wanted me to take the cheap way out and "work with them." Instead I hired a good lawyer who used his knowledge of the law and our system to save me from hundreds of thousands of dollars in debt and allowed me to make a fresh start.
When you anticipate a legal dispute with your franchisor (or supplier)
Consult with an experienced attorney in franchise or supplier litigation. Earlier rather than later is probably best, before things occur that may make litigation more problematical, such as a franchisee threatening their franchisor or going broke and becoming unable to afford legal redress. There are excellent attorneys, but large numbers of franchisees don’t know who they are or, in many cases, even that there are attorneys who are experts in this specialized field. This legal page and the pages of Blue MauMau are an excellent place to get yourself educated on who they are. See our Legal News section for articles and postings on legal issues. You can post questions in our comments or forum sections, anonymously if you like, and will probably get a speedy answer.
When you and your fellow franchisees would like to form a franchisee association
An association allows franchisees mutual support, strength in numbers, united communication with their franchisor and buying cooperative advantages. An experienced attorney who understands franchisee associations will smooth your way.
Blue MauMau has a franchisee association forum.
When you want to renegotiate the franchise renewal terms in your franchise agreement
What didn't seem that important when you signed the franchise agreement now, you realize, puts you at a disadvantage when it comes time to renew your franchise. Consider a lawyer at this juncture, realizing that your franchisor probably has no legal obligation to change the terms in your franchise agreement.
Here's an article on the ramifications to consider of franchise renewal.
When you want to turn your independent business into a franchise
Here are some useful articles for the person considering franchising their business: