buying a franchise in las vegas
Absolutely, there is a huge advantage to having an attorney review the franchise agreement in order to attempt to make changes and revisions so that you can avoid liability. I would definintely recommend hiring an attorney to review and advise.
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Absolutely. This is an important investment of both your time and money. The documents are complex.
I would be happy to discuss with you some other types of investigations you should do too. Please feel free to call me to discuss your situation and the due diligence I recommend.
This response does not create an attorney-client relationship and is not intended to provide legal advice for your specific situation.
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As a franchise attorney , who has actually walked the walk, owning and operating a very successful franchise, and a court-accepted, testifying franchise expert, I can only say you'd be crazy not to use one. And any "franchise attorney" is not enough - a particular skill set is required if you don't want to see all your time and money go down the drain.
As an example, I reviewed an FDD on a $500k franchise investment last week. My analysis pointed out some "big picture" issues with the franchise company, etc. and my recommendation was thumbs down, all the way down. And that was before addressing the legalese in the contract.
Yesterday, I had a call from one of this company's franchise owners on the opposite coast. The husband and wife are in deep trouble. They spent way more than the high end initial investment in the FDD, expenses were higher and in almost two years they've gone through their retirement accounts and maxed out all credit cards. They have yet to make a profit.
When I asked if they'd used a franchise attorney going in, the answer was yes. When I brought up the big picture issues I'd addressed in my recent review, none were even raised by their franchise attorney. Just legalese - like you need a 45-day notice, not a 30-day notice, etc.
Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Attorney & Franchise Expert
Director of Operations - Mr. Franchise
FRANCHISE FOUNDATIONS APC
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All my colleagues have given you the correct advice. There is an old line; "You don't know what you don't know". An experienced franchise lawyer can find the pitfalls and cut through the legalese. You will be making a huge investment; maybe using your savings, borrowing from a retirement plan, taking a loan from a bank or relatives. if the franchise does nott work out, you will still be liable for the loan.
The FDD says right up front, a franchise is a complicated investment, show the agreement to a lawyer. That is very good advice.
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When you've seen the paperwork for a properly registered franchise, your question will be answered!
These are complex documents with a lot of money at stake. You need a CPA, a lawyer, and potentially others on your team, and budget able to survive until profitablity. So, yes, a lawyer among others.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
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