In the fraud-filled world of franchise sales, you must take the lead in protecting yourself against promises that the “consultant” has no intention (or ability) to keep. Read the FDD carefully and retain an experienced franchisee lawyer before you sign anything.
If you agree before you start and get the agreement written down and signed, the chances of your business surviving, along with your friendship, vastly improves.
If you are going to buy a franchise with an initial fee of $40,000 and a total initial investment of $500,000 and which would lead to your personal liability for $1,500,000, you should consult an experienced franchise attorney to review the documents and check for problems and defects that you do not have the expertise to identify and understand. It may not cost any more than that house inspector—and far more is at stake.
The most valuable thing they can demand and that they are willing to “defer” fees for almost any time is a waiver and release of any and all claims. Be sure you understand that trade-off and beware of “help” with strings attached.
In evaluating and buying a franchise, there are many things you should consider. Not every franchise is a good investment. You should analyze any franchise offering carefully and make sure it does not contain one or more bad provisions that are inconsistent with what...
If you are considering buying a franchise, you should beware of boilerplate disclaimers. They come in many forms. Some are buried in the fine print near the back of a thirty-page franchise agreement. Many are duplicated in a separate document back near the receipt...
The Financial Accounting Standards Board (FASB) met on April 8, 2020 and agreed to delay the effective date of the modified Rule 606, which changed the way companies recognized revenues. In effect, the extension would be for one year. However, the extended effective...
Over the last few weeks, franchisees across the country have been faced with challenges no one ever imagined. Franchisees operate in some of the hardest hit businesses including fitness, food service, and health and beauty. Whether your business has suffered from a...
Following best practices, franchisors must adjust to new accounting rules, which take effect for reporting years beginning January 1, 2019 for most franchisors. Publicly traded franchisors were required to comply for reporting years beginning January 1, 2018.The...
Do you wonder whether there is value in hiring a franchisee attorney to review your Franchise Disclosure Document (FDD) before you commit to buying a franchise? Every prospective franchise asks that question. The question is legitimate. The answer is a resounding...
