When searching my feed reader last night I ran into this distressful thread on BlueMauMau.org, a pro-franchisee Web site. In the comments below the initial post, franchise lawyer Richard Solomon says he is giving up on trying to help franchisees. Richard says,
I’m about ready to climb down off the due diligence cross and go do something less stressful, like crisis management counseling. In crisis management, people really do want help and are willing to provide a budget for it.
I’ll admit it. There have been times where I have felt the same way as Richard when trying to assist franchisees in reviewing their franchise agreement and conducting due diligence. There are times when a franchisee is going to do the deal come hell or high water. But at this point I am not willing to stop trying to help these people.
I think Richard’s point is simple. Isn’t it unbelievable that people would be willing to invest their life savings in a franchise business but refuse to spend a little time and small expense to properly conduct due diligence?
The purpose of a franchise agreement and disclosure document review is not for the lawyer to talk the client out of their franchise business opportunity. An appropriate review will help point out the legal and business risks and possible areas of negotiation. After the review, the client must still make their own decision about whether to proceed forward. I have been told by more than one client that a review opened their eyes to help them better understand the franchise opportunity. Some moved forward while others backed away from their deal.
I have been very fortunate to work with prospective franchisees that are serious about their due diligence. Recently I had a prospective franchisee client that encountered all the classic warning signs from a franchisor. I know this client felt disappointed the deal didn’t go through but I was sure proud they were willing to walk away. Only someone serious about their business would have done so.
So don’t give up Richard (and other franchisee lawyers). It takes just one client to make you see this is all worthwhile and they definitely need our help.