I Am Looking at Purchasing a Franchise. Do I Need to Hire a Franchise Lawyer?

A franchise agreement is a contract; it identifies the rights and obligations of both the franchisor and the franchisee. So any attorney who is competent to review a contract should be able to review a franchise agreement, right? Not necessarily. There are several factors unique to franchise agreements that a franchise lawyer is specially qualified to handle.

The linchpin of franchising

is the ability to duplicate a business concept and provide a consistent product or service. It is this consistency that enables franchisors to build a brand and a network of franchised locations that reinforce the brand image. This consistency and the franchisor’s responsibility to protect its brand are what dictate many of the issues covered in a franchise agreement. Some attorneys inexperienced in franchise matters misinterpret these stipulations as biased toward the franchisor.

That is why you should retain a lawyer who specializes in franchise matters to review your franchise agreement. A qualified franchise attorney can separate contract terms and obligations that are acceptable or common practice in a franchise relationship from those that may be excessive or unusual. They can also help you negotiate with a franchisor by explaining what changes the franchisor might be willing to make and which ones will likely be rejected. He or she may also assist you in evaluating the franchise opportunity and writing your business plan.

Finding a qualified franchise attorney is not difficult. If you know someone (or know someone who knows someone) who has invested in a franchise, ask them for a referral. You can also ask your personal or business attorney or your accountant for a reference.

If your networking efforts fail to uncover a franchise attorney, your state bar association should be able to provide information. Attorneys who specialize in franchise law are likely to be members of the American Bar Association’s Franchising Forum.

As is true when hiring any professional advisor, take the time to talk with more than one attorney to find one with whom you feel comfortable. I strongly recommend that you have an attorney and other professional advisors assist you in your due diligence before you invest in a franchise. Using an experienced franchise attorney will simply yield better results.