Tips on Negotiating Franchise Agreements

I saw an interesting post from franchise attorney Michael Webster on the BlueMauMau site on Negotiating Your Franchisee Rights. Some of his helpful nuggets:

  1. Review the FDD to see if they are using franchise brokers - you may be able to knock something off the franchise fee by asking for the broker's rebate.
  2. Budget for professional advice. Hire an experienced franchise attorney to negotiate an addendum or side agreement.
  3. Get rid of the personal guaranty.
  4. Get rid of the right of first refusal - it drives down value when selling.
  5. Avoid franchises that limit your use of social media for local marketing.

Read the full article from Michael for more insight. Is it likely you will you get everything on Michael's "wish list"? Probably not. But it is worth asking. Don't be fooled into thinking that franchisors can't and won't negotiate franchise agreements.

The advice on the use of social media is often overlooked by prospective franchisees. In my opinion, a franchisor that won't allow a franchisee to market using social media is stuck in the dark ages. It just doesn't make sense in today's business environment.

See also my blog post on 11 Things Every Fanchisee Should Know. I am an absolute stickler on the trademark indemnification provision. If a franchisor won't indemnify you for the use of THEIR trademark, what else won't they do for you?

Trackbacks (0) Links to blogs that reference this article Trackback URL
http://www.rushonbusiness.com/admin/trackback/268298
Comments (1) Read through and enter the discussion with the form at the end
FranchiseClique - January 31, 2012 4:06 PM

Limiting the use of social media would be a serious detriment. Great advice!

Post A Comment / Question Use this form to add a comment to this entry.







Remember personal info?
Send To A Friend Use this form to send this entry to a friend via email.