I read an interesting article on Why Some Franchise Buyers Almost Always Make Mistakes written by franchise lawyer Michael Garner. Michael recommends digging into the information contained in Item 20 which consists of the five tables that show the status of the outlets within the system. The article is well worth the read.

My experience is that prospective franchisees will come to me very excited with a great story of how a franchisor is expanding and growing. But often, the tables in Item 20 paint a different picture. A story where franchise locations are being closed or transferred (a red flag) or where company-owned locations are closing. It is important not to fall into the sales hype. See the facts for yourself by investigating Item 20 carefully.

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Rush Nigut is a shareholder with the Brick Gentry Law Firm in West Des Moines, Iowa. His practice includes both transactional and litigation matters including franchising and business law. Rush started his legal blog, Rush on Business, in 2006. He has been quoted…

Rush Nigut is a shareholder with the Brick Gentry Law Firm in West Des Moines, Iowa. His practice includes both transactional and litigation matters including franchising and business law. Rush started his legal blog, Rush on Business, in 2006. He has been quoted or referenced by hundreds of other blogs, websites, and publications. He also is the editor of the Brick Gentry Trial Team blog and can help you identify the most qualified lawyer at Brick Gentry to handle your case. Our lawyers have a breadth of trial experience in personal injury, employment discrimination, business litigation, IP law, and class action cases.