Written by Efranchisesale Staff Saturday, 24 July 2010 06:02
If you plan to start franchising your business in the near future, you will need a qualified franchise attorney to help you draft the offering circular and franchise agreement. An attorney will also be needed when applying for trademarks and preparing registrations for your state.
Before listing your franchise for sale on an FSBO Directory, it is vital to use a franchise lawyer who specializes in franchise law. Many attorneys may claim to have this experience just because they have spent some time evaluating franchise agreements for franchisees, but when you are becoming a franchisor, you need someone with a more specialized background. Because of changes in case law, state laws and FTC guidelines, franchise laws are constantly evolving, and your attorney will need to be current on every nuance of these laws.
If you have been relying on a franchise consultant for everything else related to the expansion of your business, it may be tempting to take their advice on legal issues as well. Be careful of consultants who set you up with a franchise attorney who merely “packages” your documents, which still requires a secondary review by another attorney. Not only will this cost you more money, it can also become a conflict of interest if that same packager/consultant ends up representing your business by selling franchises on your behalf.
If your consultant offers you outsourced legal consulting, be sure you will have the opportunity to personally interview this attorney to be sure they have an adequate level of experience practicing franchise law. Franchise law is far too complex for you to trust your legal documents to someone who lacks experience.
A word of advice for new franchisors: leave the marketing and consulting work to consultant and the legal work to the lawyer. And when it is time to start selling, stay away from business brokers - advertise in a Franchises FSBO Directory.