Joel Libava (a/k/a "The Franchise King") has a list of 20 Must-Do Things Before You Buy a Franchise. It’s a great list so I thought I’d share the article with you.
The last item on his list is to "Lawyer Up". Joel explains that the franchisor has a lawyer so franchisees should too. He also says to find a franchise lawyer rather than just any business lawyer. Both are excellent pieces of advice.
My experience is that often prospective franchisees are reluctant to hire a lawyer because they don’t believe the franchise agreement can be negotiated. This isn’t always the case. I’ve worked with a number of franchisors who are willing to negotiate certain terms in their franchise agreements. Additionally, it’s important to understand what certain provisions mean. For example, you may believe you have a "fully protected territory", yet the franchise agreement may have provisions that limit this territorial protection. If you are investing a substantial amount of your life savings, isn’t it worth a legal review to understand exactly what it is you’re buying?
But most of all I like how Joel has set out a step-by-step plan for someone to explore franchise ownership. It’s not for everyone. Franchise operations fail at roughly the same rate as independent businesses. So it’s critically important to look inside yourself, examine your finances carefully and choose a franchise that fits within your talents and financial means should you decide to pursue franchise ownership.