Legal Advice For Your Franchise
Building a team of professional advisors.
Every business owner, even those with solid experience, needs to build a network of professional advisors such as accountants, lawyers, other business owners, and potential suppliers to ensure success.
It is sobering to have to think about the worst thing that could happen to you financially, legally, and emotionally, and how you would manage it. However, sound legal advice brings peace of mind, and finding a lawyer you can trust and depend on is a vital first step in the process.
Finding the right lawyer for your business
Ask people whose judgement you trust to recommend a lawyer to you. Choose carefully, as lawyers practice in different areas of law. Experienced, inside knowledge is very valuable, so be sure that the lawyer you choose is experienced in the area of law and the industry you are entering into.
Ask for a free initial consultation, and then meet with and get quotes from at least two lawyers. Decide whom you trust and feel comfortable working with, with a view to forming a long-term relationship.
Negotiate and try to get a fixed price for the legal services you need, rather than an estimated range. Know exactly what you are paying for and have it confirmed in writing to avoid nasty surprises such as hidden extras or disbursements. Ask to be kept up to date about ongoing fees, always check invoices, and ask for more detail if anything is unclear.
Define the tasks you want done in detail – the narrower and more specific your requests, the more you’ll save in legal fees. Giving your lawyer a broad, general brief may incur unnecessary expense. Also, ask your lawyer what you can do rather than leaving all the work up to them.
Understanding the fine print.
Once you have secured the services of a lawyer, obtain the documents (disclosure document, franchise agreement, etc.) from your franchisor as early as possible, even if only in draft form. Read them thoroughly! If you haven’t time to read everything, seek professional help.
Never sign anything that you do not fully understand. If you don’t understand, get professional advice.
Have your lawyer explain the risks involved in the franchise agreement, and the implications and potential consequences to you.
A word of warning: franchisors don’t readily amend their franchise agreements. Therefore, ensure that any points of negociation in the franchise agreement are open for amendment before investing in a full legal review and negotiation of the agreement.
Remember that current and past franchisees are an invaluable source of inside information – they can tell you firsthand what to expect along your journey with your chosen brand. Make the time to speak or meet with them. You’ll find their details in the disclosure document.