Things to Be Wary of in a Franchise Agreement

What terms of a franchise agreement should prospective franchisees be wary of?

All of them, but, of course, some may be considered more important than others, and in addition, a great deal of information pertinent to the FA is described in the offering circular. For example, it is Item 7 of the UFOC that specifies the 'total initial investment' required to get into a particular franchise, so it is important to understand all the documents provided (as well as the sales literature provided) when conducting proper franchise due diligence.

In the Franchise Agreement is found the exact conditions of the legal relationship with the franchisor, reasons for termination, and elements that constitute default. So, unless you are practiced with such documents, hire a professional (and not the person selling you the franchise) to help you understand what you are getting into relative to what you are being told/sold by the marketing department.