Before making the big commitment to buying a franchise, it is in your best interest to be aware of all the terms and conditions in your franchise agreement. Continue reading to learn whether you can negotiate these terms and conditions in your franchise agreement and how one of the experienced franchisee litigation attorneys at FortmanSpann, LCC can help you in doing so.
Is it possible to negotiate my franchise agreement?
It is important that you know that your franchise agreement is negotiable. However, franchisors are usually resistant to negotiating. This is because they must treat their franchisees similarly, so they cannot allow for major exceptions for you. So, you likely cannot bargain for a significant change in the franchise fee, royalty rates, brand development funds, and products and services, but you can nonetheless bargain within reason.
What are the benefits of negotiating my franchise agreement?
Put simply, if you can negotiate the terms and conditions of your franchise agreement, then you are putting yourself in the best position to make your franchise successful. Below are more specific benefits that may come with a negotiation:
- You may be able to limit your personal liability if your franchise, unfortunately, closes.
- You may be able to strengthen your territory protections.
- You may be able to receive an extension for opening your franchise.
- You may be able to receive an extension for curing certain franchise defaults.
What aspects of my franchise agreement should I negotiate?
As mentioned above, a franchisor will likely not want to undergo negotiations because, by franchise law, they cannot treat their franchisees differently from one another. However, a fair franchisor may reconsider terms and conditions that relate to your individual rights as a franchisee. Along with your personal liability and territory protections, below are some other examples of this:
- Your additional development rights: they may reconsider your need for supplemental territory protection and whether or not you should be granted the first right to establish another location in an adjoining territory.
- Your family transfers: they may reconsider the terms and conditions surrounding how you can transfer franchise ownership to your immediate family members in your estate plan.
- Your renewal rights: they may reconsider the terms and conditions surrounding how you can renew your franchise agreement so that you do not lose your important rights related to your territory, among other things.
- Your special circumstances: they may reconsider the special circumstances that relate to your individual franchise opportunity.
With all things considered, you should not have to enter negotiations by yourself. Instead, you should have the power and support that comes with proper legal representation. For this, we recommend that you do not hesitate in employing one of the skilled franchise law attorneys today.