What is a Franchise?
A franchise is a legal license from a business, the franchisor, granting a franchisee the right to operate under its trademark. The franchisee uses the franchisor’s brand and business systems and processes in exchange for a startup fee and royalties.
What is a Franchise Lawyer?
A franchise lawyer is a business lawyer specializing in franchises and related legal issues. Some work with large businesses that offer franchises. They work in these companies as in-house counsel or on a contract basis.
Franchise lawyers also work with and represent franchisees. They provide advice on buying franchise licenses, negotiate on behalf of franchisees, and help manage the franchisor-franchisee relationship. They know the state laws that apply and ensure franchisees and franchisors comply. They understand what the federal government requires franchisors to disclose before you sign an agreement.
In addition to federal and state franchise laws, franchise lawyers have expertise in other areas of the law. These are often important in franchise businesses and include business law, contract law, intellectual property, finance law, bankruptcy, and more.
When Do I Need a Franchise Lawyer?
A franchise license is legally binding. It involves a commitment of both time and money, often years and thousands of dollars. For these reasons, it makes sense to have a lawyer advise you during the entire process of seeking a franchise, purchasing the license, and setting up the business.
If you are thinking of buying a franchise, have already signed an agreement, or are an established franchisee, there are several reasons you need a lawyer with franchise experience:
- You know you want a franchise but don’t know which is right for you.
- You have received an offer and a Franchise Disclosure Document and need help reviewing it.
- You think you understand the terms of an agreement but see some red flags.
- You own a franchise and believe the franchisor has violated laws or your agreement.
- You have a disagreement or dispute with the franchisor you cannot resolve.
- Your franchise is failing, and you don’t know what to do.
- The franchisor is suing you.
What Are the Benefits of Hiring a Franchise Lawyer?
Many people choose to go it alone when purchasing a franchise. The franchisor will often downplay the need for legal representation and try to convince you that the process is easy and straightforward. You don’t have to hire a lawyer, but there are important benefits and advantages of doing so:
- Choose the best franchise
Franchisors of all types are eager to sell you a license, but which is best for you? Before you sign any agreements, an experienced franchise lawyer can advise you and help you select an industry and company that meets your needs and abilities.
- Negotiate the agreement
Too many potential franchisees assume that the offer from a franchisor is set in stone. While it may be more difficult to get changes in the terms for the largest companies, every agreement is negotiable. An experienced franchise lawyer can get you more favorable terms.
- Your own representation
Many franchisors offer their in-house counsel to franchisees. This may be fine for some issues, but these attorneys work for the franchisor. They will put their interests before yours. A franchise lawyer provides representation just for you, with your best interests in mind.
- Resolve a dispute faster
Many franchisees hesitate to take concerns to the franchisor. It’s intimidating and helps if you have a lawyer backing you. A franchise lawyer can represent you and resolve the situation more quickly. If litigation becomes necessary, they can help you take the franchisor to court.
Where Can I Find a Franchises Lawyer?
Look for an attorney specializing in franchising to get the most expertise and the best guidance for your business pursuit. You can find the right lawyer through several sources:
- Franchisees you know or have spoken with about their experiences
- A lawyer you trust who can recommend a colleague with the right experience
- Your state bar association
- Your local chamber of commerce
- The International Franchise Association
Once you have lined up some options, interview the lawyers. Ask important questions to determine who will be the best professional to advise and represent you:
- How long have you been working in franchise law?
- How many clients have you helped with franchising?
- Can you help me with the purchase of a franchise from start to finish?
- Can you litigate if that becomes necessary?
- Can you give me the names of some local franchise owners you have helped?
- Do you represent franchisors as well?
- Are you familiar with the industry I’m thinking of buying into?
- Do you have experience in other areas of business law?
- What are your fees?
Once you hire a lawyer, work with them to get the best outcome. Provide your lawyer with all the relevant paperwork and information about the franchisors, your finances, and other important factors in making decisions about your business.
With an expert franchise lawyer lined up, you’re ready to do business confidently. From choosing the franchise and negotiating the settlement to running a successful franchise and resolving disputes before they become costly, a franchise lawyer is a great ally in this industry.