FOUR STEPS TO CHOOSING A FRANCHISE ATTORNEY
What are the 4 steps to choosing a franchise attorney? How can you find the best franchise attorney?
Follow these 4 steps:
Make sure that the attorney you choose practices franchise law as a primary part of her practice. I have been practicing franchise law for over 20 years having been in-house counsel to Nutri/System when it was the number one weight-loss program in the country with 500 corporate locations and 1300 franchised locations. Since that time I have focused my practice on helping individuals who want to purchase a franchise and businesses that want to expand through franchising their business.
If you are considering buying a franchise, you should not retain the attorney until you are close to committing to one franchise. In other words, you should narrow down your selection to the one you would like to consider before retaining a franchise attorney. To help with narrowing the search, you should speak to franchisees that are already in the system or have left the system. These franchisees (and former franchisees) are listed in the Franchise Disclosure Document (FDD) that the franchisor provided to you. You should also compare each Item of the FDD (the 23 Items that are in the front section of the FDD) for each of the systems you are considering. Lastly, you may want to have a business/franchise accountant evaluate the audited financial statements of the franchisor to make sure the franchise is financially strong enough to survive the system that is in place and growth that the franchise system anticipates.
If you are considering franchising your business, I would recommend that you speak with an experience franchise consultant who can help you develop the business aspects of the franchise, such as defining the territory for a franchise, the fees to charge, etc. The consultant can also write the Operations Manual that you will need to provide to prospective franchisees, help with training procedures, etc. I would also recommend that any business that is considering franchising be a proven model that makes sufficient revenues that a franchisee could make money and still pay royalties to the franchisor.
Make sure that the franchise attorney you choose charges on a flat fee basis. Whether we are representing an individual who is buying a franchise for the evaluation of the franchise documents (including the FDD and franchise agreement), or a business that is expanding into franchising and needs the FDD and franchise agreement drafted, we understand that it is important to know up-front what your legal fees will be. We handle franchise document reviews and drafting franchise documents on a flat fee basis.
Finding the best franchise attorney can be challenging. I have several suggestions: (a) referrals from other franchisees or other individuals; (b) referrals from the franchise consultant with whom you are working; (c) Internet website such as avvo.com, which rates attorneys (we have a superb rating of 10 out of 10). Once you have narrowed down your search, interview the attorney by phone or in person. Ask questions and learn about their experience and their perspectives, as well as their fees and services. Is the attorney going to help you and be a resource for you with other experts that you may need? Can the attorney help set up your legal entity for the franchise business? If you are buying a franchise that will require a lease, is the attorney able to assist you with the lease review too? Has the attorney provided advice to you during the initial call? Does the attorney handle the legal matters for a flat fee? Hopefully these 4 steps to choosing a franchise attorney has been helpful.