3BIG
REASONS
TO HAVE AN ATTORNEY
REVIEW YOUR FRANCHISE
AGREEMENT BEFORE SIGNING
A
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2015 Issue 1 GearedUp
s an attorney at Dady &
Gardner, I limit my practice to
the representation of franchisees, dealers and distributors.
Because of this narrow scope, I have the
opportunity to interact with franchisees
and prospective franchisees on a daily
basis. As a result, I am often asked whether
it makes sense to hire an attorney to review
a franchise agreement before signing. The
answer to that question is, without hesitation,“yes”for three principal reasons.
28
first
First, it
is important
that prospective franchisees
understand what their rights and responsibilities are, and, likewise, what their
franchisor’s rights and responsibilities are
under the express terms of the franchise
agreement. Franchisees frequently call our
firm and have an issue with something
their franchisor is doing (or not doing).
Yet, the franchise agreement signed by that
franchisee often expressly addresses the
issue and gives the franchisor the right to
do what it is doing. While that does not
necessarily mean there is nothing that can
be done to help the franchisee, understanding what the franchise agreement
says about key issues in the franchisee/
franchisor relationship, before signing the
franchise agreement, allows the franchisee
to go into the relationship with his or
her eyes wide-open and to help decide
whether this is the right franchise.
franchise agreement,
but nothing in the
law precludes a franchisor from changing
the terms of a
franchise agreement
by J. Mark Dady
to provide more
rights to an individual
franchisee. Additionally, even if a franchisor might not agree to make changes as
a matter of course (or, for example, it has
already negotiated changes to the franchise
agreement with a franchisee association),
franchisors are sometimes willing to make
changes based upon unique circumstances.
If you are opening a location in a
new market, perhaps your franchisor
will agree to provide you with some
additional marketing support, or, if
you know that finding a site is going
to be a problem, perhaps you can obtain a
longer period of time to open for business.
second
Second, while
franchisors often say
that their franchise
agreements cannot be
modified, that is not true. The franchisor
may not want to make changes to its