You Can't Afford Not to Work with a Franchisee Law Firm

If you're considering buying a franchise, you're making one of the biggest investments of your life. Maybe you don't feel like you can afford the rates charged by franchise law firms, but investing a little time and money up front can prevent major headaches later. If nothing else, you should work with a franchisee law firm to go over your Franchise Disclosure Document before you close the transaction.

Selling a Franchise

If you want to sell your franchise, you should talk with your franchise law firm beforehand. Your attorney will explain what you are required to disclose to potential buyers, interpret the terms of your franchise agreement concerning selling, and help you understand the risks involved in selling. Franchise law firms are also able to thoroughly check out any potential buyers and notify you if they have had legal troubles in the past.

Predatory Franchising and College Students

Predatory franchising is designed to sell franchises that will fail so that crooked franchisors can pocket fees and go on to the next victim. Believe it or not, some of these franchisors participate in college job fairs and target students, particularly in areas where summer jobs and part-time jobs are scarce. If you're a college student who has been contacted by a franchisor, you should speak with a franchise attorney before taking any action.

Problems With Franchise Renewals

If there is no explicit renewal provision in the franchise agreement, and when state or federal law cannot be used to imply that a right to renewal exists, you may be out of luck. Here's an example: in 2002, H&R Block franchisees sued H&R Block over Block selling tax services in franchisees' territories. Block countersued, seeking a court order to terminate franchisee agreements when existing franchise contracts expired, and won.

Franchises and Federal, State, and Common Law

Federal law and common law provide little to no protection in general to franchisees. State laws vary and can be interpreted in multiple ways. Work with a franchisee attorney before signing any franchise contract. He or she can spot potential risks before you find yourself stuck in an agreement that is detrimental to you.