Young businessman in suit signing contract with his colleague while corporate lawyer explaining details of partnership sitting in modern office indoors
Vitaly Gariev, Unsplash

Many franchise buyers focus on what the franchise representatives say the franchise will do for them and overlook the written contract that actually governs the relationship. Common mistakes include assuming the agreement is standard, underestimating exit restrictions, overlooking long term costs, and signing before fully understanding risk. A careful reading of most franchise agreements reveals that franchisors often commit to very little, and in some cases, to almost nothing at all.

Why do so many franchise buyers misunderstand the franchise agreement?

Most franchise buyers have never seen a franchise agreement before. The documents are long, technical, and sometimes presented late in the sales process, often after excitement and momentum have built. Buyers are encouraged to focus on training, support, and growth potential, while the agreement quietly controls fees, termination rights, and exit options.

The agreement is not background paperwork. It is the deal.

Is the franchise agreement just a formality?

No. One of the most common mistakes is treating the franchise agreement as a formality after deciding to buy the franchise. In reality, the agreement defines nearly every aspect of the relationship, including what the franchisor will do for you and what happens when things go wrong. Buyers who assume the contract is standard often discover later that small provisions carry significant consequences.

What do franchise buyers misunderstand about risk?

Many buyers believe risk is limited to their initial investment. In reality, franchise agreements often include ongoing obligations that survive termination, personal guarantees, noncompete restrictions, and post termination payment requirements. These provisions can create financial exposure long after the business stops operating.

Understanding risk requires reading beyond headline terms and marketing summaries.

Why do buyers underestimate exit restrictions?

Exit rights are one of the most misunderstood parts of a franchise agreement. Many agreements make it difficult or expensive to sell, transfer, or walk away. Buyers often assume they can exit like any other business and start up a new nonfranchise business. In reality, franchisors have noncompete terms, control transfers, impose approval requirements and may restrict who you can sell to and on what terms.

The ability to exit matters just as much as the ability to enter.

What do people get wrong about franchise fees and costs?

Franchise buyers often focus on the initial franchise fee and underestimate long term costs. Royalty structures, marketing fund contributions, required vendors, technology fees, and audit rights can significantly affect profitability. These costs are often buried across multiple sections of the agreement and franchise disclosure document.

Profitability depends on understanding total obligations, not just startup costs.

Why do buyers assume franchisors will never negotiate?

Another common misconception is that franchise agreements are entirely nonnegotiable. While franchisors rarely rewrite agreements wholesale, many are willing to discuss specific provisions when concerns are raised thoughtfully. Buyers who assume negotiation is impossible often give up leverage before the conversation even begins.

Silence is not strategy.

What role does timing play in franchise mistakes?

Many mistakes occur because buyers wait too long to seek legal review. By the time the agreement is presented, buyers may feel pressure to move quickly. Deadlines, incentives, or territory availability can create urgency that leads to rushed decisions. Legal review is most effective before expectations are set and the prospective franchisee has already decided to purchase the franchise.

Time pressure benefits the seller, not the buyer.

What is the most important mindset before signing?

The most important mindset is discipline. Franchise buyers who succeed long term approach the agreement as a business contract, not a reward for being selected. They ask hard questions, focus on the most impactful issues, and remain willing to walk away if the risks do not align with their goals.

Confidence comes from clarity, not enthusiasm.

Final thought for prospective franchisees

A franchise agreement is not designed to be fair. It is designed to protect the franchise system. That does not mean it is automatically a bad deal, but it does mean you must understand it before you sign. The most expensive franchise mistakes are often made before the doors ever open.

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JESHOOTS.COM, Unsplash

Franchise agreements are negotiable more often than people think. The franchisees who have the most success focus on three to five high impact issues, remain patient throughout the process, and are genuinely willing to walk away if the deal does not make sense. The ability to say no is often what creates leverage.

Can franchise agreements actually be negotiated?

Yes, franchise agreements can often be negotiated, but not in the way many buyers expect. Franchisors rarely rewrite agreements line by line. Instead, negotiations typically focus on a small number of key provisions that materially affect risk, cost, and exit options. Buyers who approach the process thoughtfully and selectively tend to have far better results than those who ask for sweeping changes.

Why do some franchise negotiations fail?

Many negotiations fail because the franchisee prospects try to negotiate too much, too quickly. When every issue is treated as equally important, the franchisor has little incentive to engage. Another common problem is impatience. Franchise negotiations often move slower than buyers expect, especially when decisions require internal approvals. Frustration and urgency can weaken leverage. Franchisors often say no first. That does not mean the discussion is over. Franchisees who question the assumption that agreements are nonnegotiable frequently achieve better outcomes than those who stop at the first response.

What are the most important issues to negotiate in a franchise agreement?

Successful franchise negotiations usually focus on three to five high impact issues. These often include fees (especially for multi-unit franchisees), termination rights, renewal terms, transfer restrictions, indemnification, personal guarantees, noncompete provisions, and territory size and protections. Not every issue matters equally. The goal is to identify the provisions that affect your downside risk and long term flexibility rather than minor operational details.

Why does focusing on only a few issues improve negotiation outcomes?

Focusing on a limited number of issues signals seriousness and reasonableness. It shows the franchisor that you understand the business relationship and are not attempting to renegotiate the entire system. Concentrated requests are easier to evaluate internally and more likely to receive approval. Precision creates credibility.

How important is patience during franchise negotiations?

Patience is a strategic advantage. Franchisors often test whether a buyer will push too hard or fold too quickly. Allowing time for review, follow up, and internal discussion improves outcomes and prevents emotional decision making. Buyers who rush often accept unfavorable terms simply to keep the deal moving.

Why is the ability to walk away so important?

The willingness to walk away is one of the strongest forms of leverage a franchisee (or any business person) has at their disposal in a negotiation. If a franchisor believes you will sign regardless of the terms, negotiation power disappears. Calmly communicating that certain issues are deal breakers forces clarity. Sometimes the best outcome is not a concession but confirmation that the franchise is not the right fit.

Does saying no actually help a franchisee?

Yes. Saying no does not mean being confrontational. It means being clear. Franchisees who respectfully decline unfavorable terms often receive better counteroffers or additional explanations that improve the decision making process. Even when concessions are not granted, the franchisee gains valuable insight into how the franchisor operates.

What role does legal review play in franchise negotiation?

Legal review helps identify which issues matter most and how they impact you. A franchise attorney can distinguish between provisions that are standard and those that present unusual risk, particularly under state specific franchise laws. Effective negotiation is not about arguing every clause but about understanding consequences.

What should a franchisee do before entering negotiations?

Before negotiating, a franchisee should understand their financial tolerance and risk, long term goals, and exit strategy. Knowing what you need, what you want, and what you cannot accept makes negotiations more disciplined and less emotional. Preparation is often more important than persuasion.

Final thought for franchise buyers

Franchise negotiation is not about winning every point. It is about protecting your downside while preserving the opportunity. Focus on the issues that matter most, move deliberately, and remain willing to walk away. In many cases, the confidence to say no is what ultimately gets you to yes.

3D render of AI and GPU processors
Igor Omilaev, Unsplash

Artificial intelligence (AI) is here to stay.

Clients are now using it all the time. For many it is the first step before contacting a lawyer, if they contact a lawyer at all now. And yes, people are absolutely using ChatGPT and other AI tools to draft contracts.

Recently, a client sent me an agreement they had prepared using AI and asked me to take a look.

Here is the honest truth.

It was surprisingly good.

The structure made sense. The language was generally clear. It even covered many of the basics you would expect in a simple agreement. It probably was about 75-80 percent of what I would consider a usable contract.

But it’s the other 20-25 percent that often matters most.

Contracts are about protection, intent, and consequences.

That is where AI still misses some very important things.

When I reviewed this agreement, there were several issues that had nothing to do with grammar or formatting and everything to do with risk and liability. These are the types of issues that rarely jump out unless you look at agreements every day and have seen how small mistakes turn into big problems.

Here are a few examples.

First, the agreement identified the licensor (my client) as the individual, not the company. That may seem harmless, but it is not. The client operates through an LLC for a reason. If the agreement names the individual instead of the entity, you may have just given up your limited liability protection without realizing it. I revised the agreement to clearly identify the licensor as the company, not the individual.

Second, the limitation of liability language needed help. AI included something, but not enough. We strengthened the limitation of liability provisions and added an indemnification clause to better protect against claims, damages, and legal fees. This is one of those areas where a few sentences can make a massive difference if something goes wrong.

Third, the agreement did not specify governing law or where disputes would be resolved. That might not matter until it really matters. I added Iowa as the governing law and an exclusive jurisdiction provision requiring that any claims be brought in Polk County, Iowa. Clarity and predictability are your friends when disputes arise.

Finally, the signature block needed cleanup. The agreement needed to show that the company is the licensor and that the individual is signing in their capacity as President. That reinforces the entity protection and avoids confusion later.

None of these issues mean AI failed.

They simply highlight what AI does not do yet.

AI does not know your business context.
AI does not understand how courts interpret risk.
AI does not appreciate how liability actually plays out in real disputes.

AI is only as good as your prompts, and if you do not have legal training and education, your prompts are likely to fall short.

AI is a tool. A very useful tool. It can save time and help you get started. But it is not a substitute for judgment, experience, and legal review.

Think of AI as a first draft assistant, not your final safety check.

If you use AI to prepare an agreement, that is fine. In fact, it can be a smart starting point. Just make sure you have a lawyer review it before you sign or send it out into the world. The goal is not just to have an agreement, but to have one that actually does what you think it does and protects you the way you expect.

That last step is still very human.

And for now, that is a good thing.

Twenty years ago, Rush on Business began with a simple and deliberate goal: make the law understandable for everyday business owners. At the time, I took a chance on the idea that openly sharing clear, practical legal guidance through a blog could genuinely help people and, in doing so, build meaningful client relationships. I never could have imagined how many business owners it would reach, how many conversations it would start, or the lasting impact that approach would have over the years.

This blog is written for people running companies, signing leases, buying franchises, hiring employees, and taking real financial risks. People who did not have time for legal jargon, law review articles, or theory. They just wanted straight answers they could understand and use.

Over the years, the topics have been wide ranging. Franchise agreements. FDD red flags. Contracts that looked fine until they did not. Disputes that could have been avoided with one better question asked earlier. Decisions that carried legal consequences people did not flag soon enough.

The focus has always been simplicity. I translate complex legal issues into clear, practical guidance so business owners can make informed decisions with confidence.

If there is one lesson from twenty years of writing, it is this: clarity matters. When business and franchise owners understand what they are signing and why it matters, they make better decisions. Better decisions lead to stronger businesses and fewer costly surprises.

My writing has always been about helping business owners protect what they are building. Writing has been a way to teach, to warn, and sometimes to slow someone down just long enough to avoid a bad decision.

To everyone who has read along, shared a post, or reached out with a question that started with “I read something you wrote,” thank you. That is the highest compliment.

Twenty years later, the mission remains unchanged. Simple. Practical. Understandable legal information. I am so thankful for all this blog has provided to me. And I look forward to continuing posts throughout this coming year.

Rolling dice on blue.
Edge2Edge Media, Unsplash

Last week, I attended the Annual Forum on Franchising. As always, it was a great chance to connect with peers, share stories, and stay in tune with what’s happening across the franchise industry.

But something stood out this year.

The two most crowded sessions focused on topics that should raise concern for any current or prospective franchisee:

Franchise breaches and workouts between franchisors and franchisees.

People were packed into the rooms, lining the walls, notebooks open, and listening intently. These were sessions about conflict, about legal issues, about what happens when a franchise relationship breaks down.

At first, it just seemed like a shift in interest from franchise disclosure issues. But the more I thought about it, the more concerned I became.

Because here’s what it really tells us:

Franchising is becoming riskier for franchisees.

Every year, individuals and families invest hundreds of thousands of dollars into franchise systems. They commit their time, savings, and often their future to a business they don’t fully control.

And based on what I saw last week, more of those relationships are hitting trouble. It’s almost like a roll of the dice on whether you will end up with responsible franchisor.

But here’s the good news.

Franchising still works. When done right, it’s a powerful path to ownership, scalability, and community impact. But it only works if franchisees go into the relationship with clarity, eyes open, and protections in place.

If you’re a franchisee, or considering becoming one, here are three things you can do to reduce your risk before you invest.

1. Talk to Former Franchisees, Not Just Current Ones

Franchisors will happily connect you with current franchisees. You should absolutely speak to them.

But the most honest and informative feedback often comes from those who have left the system.

Take time to read Item 20 of the Franchise Disclosure Document. It lists every franchisee who exited the system in the past year. Reach out to them directly. Ask why they left. Find out what they wish they had known when they started.

Their insights often reveal parts of the business that aren’t obvious during the sales process.

The people who walked away have stories that current operators might not tell you.

Listen carefully.

2. Hire a Franchise Attorney Who Knows the Industry

Franchise agreements are unlike standard contracts. They are long, detailed, and heavily tilted in favor of the franchisor.

You need someone who understands how franchise law works. Not your friend who handles divorces or your cousin who does real estate closings. A fellow franchise lawyer posted while at the Forum, “Don’t hire a dabbler.”

A qualified franchise attorney will break down the agreement in plain language. They will help you understand exactly what rights you’re giving up, what obligations you’re agreeing to, and what red flags to watch for.

This is not the time to save money by cutting corners on legal advice.

A few thousand dollars spent now can prevent much larger losses down the road.

3. Stress-Test the Financials With Conservative Assumptions

Most franchisee failures are not the result of a bad brand. They happen because the operator ran out of cash, expected more revenue, or underestimated costs.

Franchisors may show you average earnings or even top-performer data. But you need to run your own numbers and then test them under pressure.

Ask yourself:

  • What happens if your costs are higher than expected?
  • What if you open later than planned?
  • What if revenue is half of what’s projected in your first year?

Build a model that can survive slower growth or unexpected delays. Give yourself margin. Avoid operating on razor-thin assumptions.

The more breathing room you have financially, the more options you’ll have if things don’t go perfectly.

Final Thought: Preparation Is Protection

Those packed sessions on franchise disputes weren’t just full because the topic was trendy. They were full because more franchisees are running into problems they didn’t anticipate.

And the best way to avoid becoming one of them is to prepare differently.

Franchising still offers enormous potential, but it isn’t a guarantee. It requires diligence, discipline, and a clear-eyed understanding of what you’re signing up for.

Remember this:

You are entering a long-term relationship where the other party wrote the rules.

So, take your time. Ask the uncomfortable questions. Seek advice from people who have been where you’re going.

The franchisees who thrive are rarely the ones who rushed in.
They are the ones who took the process seriously, did their homework, and built a strong foundation from the very beginning.

Reach out today for a focused, practical consultation.

The word idea, carved into a piece of urban art.
Nick Fewings, Unsplash

It’s almost 5:00 pm on a Friday. Thought I’d share five things you can check on by Monday to improve the legal protection of your business.

  1. Is your operating agreement outdated? Time to review before disputes arise.
  2. Is your employment handbook updated? A simple policy could save you thousands.
  3. Any unwritten contracts? Get it in writing and get signatures.
  4. Website privacy and terms of use policies? If you have customers coming to your site, get policies in place.
  5. Are you mixing personal and business assets? Do not mix your personal and business assets. Do not pay for personal items directly out of your business accounts. Do not defeat the purpose of your legal entity.

Spend just an hour this weekend looking at these issues. Your future self will thank you.

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Priscilla Du Preez 🇨🇦, Unsplash

While this is not my typical area of law, it is important to note that, as of today—July 1, 2025—Iowa’s new hands-free cell phone law is officially in effect.

There will be a warning period through December 31, 2025. After that, citations and fines may be issued.

More significantly, if a driver causes an accident while using a handheld device, it could lead to a reckless driving charge. If the accident results in serious injury or death, the driver could even face felony charges.

Businesses should take this seriously. Now is the time to implement or update policies requiring hands-free use of cell phones in all company vehicles. This is not just about compliance—it is about protecting employees, the public, and your company.

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Brett Jordan, Unsplash

Sometimes, the law doesn’t come down to pages of statutes or hours of courtroom drama.
Sometimes, it comes down to one word.

We had a case like that. And honestly—it was a blast to argue.

Our client worked for a marketing company. He applied for a job that had been publicly posted. Nothing secret. Nothing shady. Just a job listing like millions of others online.

Here’s the problem: the company posting the job happened to be a client of his employer.

The marketing company claimed our client violated his non-compete agreement. Why? Because the agreement said he could not “solicit” their clients.

But here’s the question the whole case hinged on:
Is applying to a job soliciting?

We said no.

They said yes.

And the court? The court reached for the dictionary.

We walked the judge through the plain meaning of “solicit.” It means to ask for something, to try to obtain something from someone. We argued our client didn’t do that. He did not reach out. He did not pitch. He did not persuade. He responded to a public ad—just like anyone else would.

The court agreed. No solicitation. No violation.

It’s amazing how one word can change the course of a person’s career. And win or lose a case.

The takeaway?
Words matter.
In contracts. In conversations. In court.

If you’re signing a non-compete, or any agreement really—make sure you understand the words inside it. Because sometimes, that one word can be the line between freedom and a fight.

And in our case?
That one word made all the difference.

A wooden gavel.
Tingey Injury Law Firm, Unsplash

At first, everything was great.

You built something from scratch with a friend, family member, or business partner. You split the responsibilities. You shared the risks. You dreamed big.

But now, things are not so great.

There is tension over money. (Ironically often when success occurs). Disagreements over direction. One person thinks they are doing all the work. Another feels pushed out. Or maybe you discovered behavior that crossed a line—ethically, financially, or legally.

This is the point where a partnership or shareholder dispute often begins.

What Makes These Disputes Different

Business litigation is complex. But partnership and shareholder disputes add a unique twist:

They are personal.

You are not just arguing about numbers or contracts. You are often arguing with someone you once trusted—someone who knows where the skeletons are buried.

These disputes are emotionally charged. The damage is not just financial—it is relational. That is why our first step at Brick Gentry is not writing a motion.

Our first step is listening.

Step One: Understanding the Relationship

Before we can advise you on rights, remedies, or courtroom strategy, we need to understand:

  • What does your operating agreement or shareholder agreement say (if one exists)?
  • What roles and expectations were understood—even if not written down?
  • What financial contributions and sweat equity were made?
  • What events triggered the dispute?

We often find that the written agreements only tell half the story. The rest is in the history—and that is where our litigation strategy starts to take shape.

Step Two: Knowing the Leverage Points

We approach every dispute by identifying key leverage points:

  • Fiduciary duties: Did a member or officer breach their duty of loyalty or care?
  • Minority shareholder oppression: Is someone being frozen out of management or profits?
  • Deadlock: Are there decisions that cannot move forward because of a 50/50 split?
  • Unauthorized actions: Has someone taken company money, entered contracts, or hired people without authority?

We need to understand these issues to position your case for settlement leverage or trial strategy—whichever serves your best interest.

Step Three: Balancing Business and Litigation Strategy

Some clients come to us ready for war.

Others just want out.

We guide you through both tracks:

  1. Business exit strategy
    Sometimes the smartest move is to negotiate a buyout. We draft terms that protect you long after the paperwork is signed—non-competes, release of liabilities, tax considerations, and more.
  2. Litigation strategy
    Other times, negotiation fails. That is when you need our litigation team. We use targeted discovery, expert financial analysis, and persuasive courtroom advocacy to push your case forward.

Either way, you are never left wondering about your options. You will know what we are doing, why we are doing it, and what comes next.

Real-World Example

A recent client, a co-founder of a successful company, came to us after being locked out of the company’s bank accounts.

The other partner had taken control of operations and shut off communication.

There was no buy-sell agreement.

Our team:

  • Filed an emergency motion for injunctive relief.
  • Moved quickly to protect the company accounts from further dissipation of funds.
  • Conducted a thorough review of financials and unauthorized transactions.
  • Used that pressure to negotiate a favorable buyout that allowed our client to walk away with a clean break and real compensation.

The lesson?

When things get messy, strategy matters more than emotion.

Why Brick Gentry

We have been representing business owners across Iowa for decades. What sets us apart is not just our legal knowledge—it is our ability to handle sensitive, high-stakes disputes with precision and perspective.

Our approach combines:

  • Deep experience in business formation and litigation.
  • Strategic use of corporate records and financial data.
  • Negotiation techniques that reflect our understanding of people—not just paper.

And above all, we treat your business like it is ours—because we know how much it means to you.

Final Thought

If your business relationship is breaking down, do not wait until things spiral. Every delay can cost you leverage.

Instead, sit down with someone who knows not just how to handle the legal fight—but also how to solve the business problem.

Destroying The Fake Information. 3D Render.
Hartono Creative Studio, Unsplash

I want to issue an important warning about an ongoing scam.

Fraudsters are using my name—and the name of a company called Business Consulting Services—to deceive people into sending money under the false promise of helping them sell or rent their Mexican timeshare or other real estate. I have written about this scam before here, but it continues to surface.

These individuals have falsely listed me as the CEO or, in some cases, as the attorney involved in transaction. Let me be clear: I am not affiliated with Business Consulting Services as the CEO, and this business does NOT engage in the sale or rental of Mexican real estate.

Do not send these scammers any money. It is fraud.

We have reported this matter to the FBI.

If you have been contacted or targeted, I encourage you to report it to the FBI’s Internet Crime Complaint Center (IC3) at www.ic3.gov.

Please protect yourself.