Are you considering becoming a franchisee? This can be an excellent choice for you as an entrepreneur. There are many advantages to opening a franchise, and you are likely excited to get started.
However, before you sign on the dotted line, you need to ensure that you are well-informed about the franchise contract you are signing. In fact, you would be well-served by hiring a business franchising lawyer to assist you in the process so you can avoid costly legal mistakes. As you move forward, consider these three important things you should know about franchise contracts:
1. Many franchise contracts are standardized
When you open a franchise, one of the great benefits is that you already have the infrastructure of a set of guidelines and a brand identity, so you do not have to build these things for yourself. One of the main reasons the brand of a franchise remains strong is because franchises are standardized. In other words, as a franchisee, your contract will likely be non-negotiable.
2. An attorney can review your franchise agreement
One mistake that many new franchisees make at the beginning is simply signing an agreement on trust, even if they do not fully understand all the complex ramifications of the contract. This is a problem because franchise agreements are often written from the perspective of the franchisor and may contain terms that are not necessarily favorable for the franchisee. An attorney can review your franchise agreement before you sign so you feel confident that your rights are protected and there are no unpleasant surprises later down the road.
3. If the agreement does not fit, search for another one
Since many franchise agreements do not allow room for very much negotiation, if there is any room at all, it is important to keep an open mind about which type of franchise you will agree to. If you get your heart set on a particular brand but then discover the contract is non-negotiable and contains terms you cannot live with, you do not want to feel forced into the deal. Review many different agreements to get a better idea of what is possible before you decide to sign. Better yet, consult with a business franchising lawyer to get specialized advice and counsel that is custom-tailored to your particular needs.