Before moving forward with your franchise purchase, you should consider consulting with both an existing franchisee and a franchise attorney. Doing so may just be the only way that you can be confident that your decision is the right one. Continue reading to learn why you should contact both an existing franchisee and one of the skilled franchise law attorneys from FortmanSpann, LLC.
Why should I contact an existing franchisee before buying a franchise?
As a prospective buyer of a franchise, you must go forward with the process of due diligence. That is, due diligence is a comprehensive appraisal of a franchise to establish its assets, liabilities, commercial potential, and otherwise. Importantly, receiving information from other franchisees involved in the franchise system should be included in this process of due diligence. Just some of the questions that you should ask them include the following:
- What products or services do you offer?
- How has your franchise done financially with the products or services you offer?
- How much are the franchise fees and royalties?
- Are the franchise fees and royalties appropriate for the products or services you offer?
- Did you receive training when initially buying the franchise?
- Is the training appropriate for the products or services you offer?
- Do you receive continued support from the franchisor?
- How much support do you continue to need for the products or services you offer?
Notably, you can find the contact information of existing franchisees in Item 20 of your franchise disclosure document. It is advised that you contact more than one franchisee, and not just the “star franchisees” that the franchisor recommends, to get a well-rounded feel of what you should expect.
Why should I contact an experienced franchise law attorney before buying a franchise?
The franchise law attorneys at FortmanSpann, LLC have valuable experience that can guide you in the right direction when it comes to a franchise purchase. With that being said, you can receive invaluable legal advice by asking the following questions:
- Does buying into this franchise have potential financially?
- Are the franchise fees that I will be charged fair?
- Are the royalties that I will continue to pay monthly or weekly fair?
- Am I required to contribute to advertising fund fees?
- Am I granted a protected territory?
- Am I required to enter into a lease obligation?
And once you settle that this is the right decision for you, a franchise law attorney can continue to assist you by reviewing your proposed franchise agreement, analyzing your franchise disclosure document, and negotiating with the franchisor as needed. So, if you are ready to get started today, pick up the phone and give our firm a call.