Legal & Consulting Services for Franchisees
Purchasing a franchise can be a significant financial investment, and without a thorough understanding of the FDD, Franchise Agreement, and market analytics, your investment could sway widely from your expectations.
We work with potential franchisees who are evaluating one or more franchise concepts to provide a concise, unbiased, and expertly-researched report of both the good and bad of their chosen franchise concept(s).
Understanding Franchise Brokers
A franchise broker helps his or her clients by scoping out different franchise opportunities and making recommendations based on search criteria. Many franchisors choose not to work with brokers, but those who do pay a commission to the broker somewhere in the neighborhood of 20-40% of the franchise fee upon sale. It follows that the higher the franchise fee, the more commission to the broker.
Unlike a broker, we have zero personal interest in whether or not our clients follow through with the franchise purchase. Clients will receive an unbiased evaluation of their chosen franchise opportunity for a flat fee.
Ultimately, our job is to provide an honest evaluation of franchise opportunities so that our clients can make an informed decision.
Understanding The FDD
The Franchise Disclosure Document is required document that all franchisors must deliver to prospective franchisees. This is usually a lengthy and wordy document with layers of information that greatly influence the profitability and rights of the franchise owner. The responsibilities of both franchisor and franchisee are found in the FDD, along with fee arrangements, vendor contracts, renewal/transfer policies, and how the franchisor will handle neighboring locations. This hefty legal document can be difficult to accurately decipher, especially for those who have no formal experience in franchising.
Even with a thorough understanding of the FDD, it often takes an unbiased third party to fully assess the financial feasibility of a business model. Many times the romance of starting a new business can interfere with making a responsible financial decision. As franchise attorneys we can help you understand the legal ramifications of your franchise agreement, but we can also make sure that the numbers, market, and relationship of your future franchise purpose are in your best interest.
In-depth financial profile including expected profit timeline
Franchisor vs. franchisee takehome pay
Interviews with current franchisees regarding profitability
Analysis of Item 19, Financial Performance Representations
Computing the initial and on-going costs
Franchisor buy-back of failing franchises
Competition identification, comparison, and market awareness
Technology and infrastructure assessment
Comparing the pros and cons of different franchise concepts
How the franchisor establishes protected territories and protects against brand saturation
Your obligations to participate in the actual operation of the business
Franchisor’s obligations in making you successful
Breakdown of the franchisor’s business relationships
Support systems in place from the franchisor or other franchisees
Restrictions on other employment or side-businesses
Renewals, terminations, and resolving problems
Suggested contract terms to negotiate with the franchisor