Before you buy a franchise, a franchisor must give you a copy of their “Franchise Disclosure Document” (also called an “FDD”). The FDD contains copies of any contracts you will need to sign and a lot of information about the franchise system, the franchisor and the franchise relationship. The intent of the FDD is to give a prospective franchisee the information they will need to make an informed investment decision. Put another way, it is part of the due diligence process.
When we help prospective franchisees, we usually separate our work into 2 phases. In the first phase we review the FDD and Franchise Agreement and prepare a written summary of areas that are: (a) worth trying to negotiate, (b) areas of potential concern, or (c) issues that may not be readily apparent to a non-franchise lawyer, but merit noting. If you have specific concerns, we will address them at this stage. Next, we will communicate – by phone and/or email – about which points we raised that you may wish to approach the franchisor about modifying for your transaction. For this phase, we typical work on a flat fee arrangement.
If the first phase has identified areas that you would like to try to negotiate with the franchisor and you would like Maslyn Law PLC to help, we will provide you with a flat fee quotation. If the franchisor refuses to negotiate any terms, we do not charge anything for this phase. But, if we have begun work and the franchisor engages in substantive discussions or negotiations about the items you want to negotiate, the fee will apply.
Most of our practice is focused on representation of franchisors. We have 20 years of experience writing FDDs and Franchise Agreements. We know what information is supposed to be in the FDD and we can identify disclosures that may be hiding critical information. We also know which terms in a Franchise Agreement are typical and necessary and which terms are unfair or worse. Best of all, we won’t waste your time or the franchisor’s time trying to negotiate provisions that really are non-negotiable.