Expert Advice When You Need It Most

Four Things to Make You Go 'Hmm Before Buying a Franchise

Written by: Rush Charles Nigut

Reputation Level 8

Business Franchises

Posted over 2 years ago. 2 helpful votes, 0 comments

Save

Share with:

You don't need a lawyer to review the agreement.

Run (don't walk) from the franchisor that tells you you don't need a lawyer to review your franchise agreement.

I would prefer you don't talk with the other franchisees. You should only talk with me.

Franchisors are required to give you the names of their existing and former franchisees. Contact absolutely as many of these franchisees as possible. In particular, contact franchisees in your region because franchisee profitability may vary greatly from region to region. Be very wary of the franchisor that does not want you to talk with franchisees. What are they trying to hide?

We won't negotiate any terms.

The truth is most franchisors are willing to negotiate certain terms in the franchise agreement. Your negotiating power may depend on a number of factors. Is the franchisor new? Are you purchasing multiple locations? Are you purchasing an area development agreement?

Trust us, we can't (and won't) change the agreement but we won't really hold you to that provision anyway.

And never, I mean NEVER, believe the franchisor that tells you they won't hold you to the terms of their written agreement. You can be assured that the franchisor's lawyer in any lawsuit will never acknowledge that statement was ever made and most franchise agreements are written so that any such statement could not be used as evidence anyway.