Buying a franchise is an expensive proposition. From the initial franchise fee to the reserve capital you will need for your first six to twelve months of operations, as a prospective franchisee, every penny matters.
With this in mind, do you really need to speak with a franchise lawyer before you buy? If you have already made up your mind, what is the benefit of having someone review the Franchise Disclosure Document (FDD) and franchise agreement? Unfortunately, many prospective franchisees attempt to save money by foregoing a legal review, and their decision ends up costing them substantially in the years to come. 10 Reasons to Hire a Franchise Lawyer Before You SignThere are numerous reasons why all prospective franchisees should seek legal representation. Here are 10 examples:
If you are thinking about buying a franchise, franchise law firms offer a variety of fixed-fee franchise business review services for prospective franchisees. For more information, you can contact a firm online or call (202) 293-3947 for a free initial consultation.
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When choosing a franchise to buy, there are several important factors that should guide your decision. Are you passionate about the business? How much will you need to invest (in terms of both time and money)? How much can you reasonably expect to make? What are the legal risks involved?
On the legal side, franchisees in all industries will face many of the same issues. However, many franchisees will face industry-specific legal concerns as well. Here is an overview of some of the top legal issues facing new and established franchisees: Industry-Specific Legal Considerations for Franchisees 1. Health and Fitness In the health and fitness industry, one of the biggest legal concerns for franchisees is the risk of liability. What happens if one of your customers or members gets injured on your equipment or while taking a class with one of your instructors? Your franchise agreement will make clear that this is solely your responsibility, so buying adequate insurance coverage and forming a company to shield your personal assets should be top priorities. 2. Green and Eco-Friendly Cleaning businesses and other franchises that promote “green” products and services must be sure not to overstate their environmental friendliness. To avoid advertising law and other issues, franchisees should do enough research to be comfortable that there is factual support behind their eco-friendly claims. 3. Printing, Copying and Signs If a customer asks you to print a Super Bowl or World Series-themed sign, can you print it? While customers will be most likely to be on the hook for any copyright or trademark violations, franchise owners in the printing, copying and sign industries should be aware of the basic intellectual property considerations that are relevant to their businesses as well. 4. Restaurants Could you get sued if one of your customers gets sick? What if someone slips on a recently-cleaned floor? Can your franchisor mandate expensive point-of-sale system upgrades or a complete remodeling of your restaurant on a moment’s notice? Restaurant franchisees can face numerous potentially-significant liabilities, and these should factor into the overall risk and viability assessment of the franchise opportunity. 5. Mobile Businesses While mobile franchises offer relatively low-cost opportunities to become your own boss, they present some unique legal questions as well. Do you need any special licenses or permits? Is it ok to drive your personal vehicle for business? Is it ok to drive your business vehicle for personal purposes? What happens if you cause damage a customer’s home or business premises? General Legal Considerations for Franchisees On top of these and other industry-specific issues, most franchisees will need to proactively address a wide range of other legal considerations as well. For example, a standard franchise agreement will raise issues such as:
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Jeffrey GoldsteinOne of the top franchise litigators representing franchisees, dealers and distributors in commercial complex litigation cases across the country. Mr. Goldstein's main office is in Washington, DC. but has represented clients in state and federal courts and arbitrations in cases involving fraud, RICO, antitrust, encroachment, and wrongful termination. ArchivesCategories
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