Purchasing a Franchise?

If you are considering investing in a franchise, we cannot urge you enough to contact an attorney experienced in franchisee representation (NOT a franchisor attorney). It is crucial to understand three things:

  1. franchise brokers & representatives are salesmen;

  2. franchisor attorneys will downplay the contract as “typical” and “standard”; and

  3. the franchise agreement is written to benefit the franchisor.

Fortman Law has personally seen franchise investments ruin lives. We have seen financial ruin, marital ruin, and emotional ruin, even suicide because of a bad franchise investment. We have heard countless “I wish I would have known” and “How can that be legal?”. Unfortunately, by the time people come to us with those comments is often too late. The damage has been done. While we try our best and hardest to undo the damage, we can never restore everything to 100% and, in some cases, we must tell people to just cut their losses. Like our clients, we often wish they would have contacted us PRIOR to purchasing a franchise. We could have at least warned them, shown them the red flags, and explained the risks.

Like any investment, we cannot predict the future, but our extensive experience can help guide you and inform you of the true risks you run. These risks will vary depending on the franchise itself, including the franchisor and most importantly the franchise agreement. The franchise agreement is a highly complex business contract that is often several pages long. In addition to the franchise agreement itself there is often additional agreements that the franchisor requires you to sign including personal guarantees, waivers, purchase agreements, license agreements, and more. Unlike credit card agreements or other form agreements, franchise agreements should not be taken for granted as “typical” or “standard.” These are long term agreements that often require you to pay money to the franchisor even if you are losing money.

If you intend on investing in a franchise anywhere in the United States, we highly recommend you contact us at Fortman Law. Spending just 10% of your initial investment can not only save you from potential financial ruin but will put you in a better position for your future investment. We will extensively review your franchise agreement and franchise disclosure document and point out all the positives, negatives, and red flags. In addition, we will be able to access legal information not disclosed in the franchise disclosure document and prior sales and closure trends. Remember the franchise disclosure document and franchise agreement are written to sell and benefit the franchisor NOT YOU. It is important to see the big picture. You cannot rely on what the salesman tells you or even the sales documents you see prior to signing the franchise agreement. In fact, the franchisor will have you sign a document saying that you are NOT relying on those sales pitches. What is in the contract is what reigns supreme in a court of law.

No matter the size of the franchise. No matter the location of the franchise. No matter the franchise industry. Fortman Law can help. We will provide you with practical, strategic advice that is custom to you and your situation.