Owning a franchise can give you financial freedom if it is done properly. Unfortunately, some franchisees do not properly research and plan for their new business and end up making costly mistakes. If you are considering buying a franchise, here are some mistakes you need to avoid:
Going It Alone
One of the biggest misconceptions that franchisees make is believing that they do not need their own attorneys to help them through the process. Regardless of how straightforward buying a franchise might seem to you, it is important that you have legal representation to provide counsel to you.
An attorney like Mohajerian A Professional Law Corporation can be with you from the start. He or she can help with researching a franchise and determining whether or not it is a good investment. Your attorney can also help with focusing on what is most important in getting your business started. For instance, the attorney can review the franchise contract and help with negotiations, if necessary.
In the event that your franchise does not work out, the attorney can help with reviewing your contracts and the actions of the franchisor to determine if you have any legal options to help you recoup some of your financial losses.
Failing to Read the Franchise Disclosure Document
The Franchise Disclosure Document, or FDD, is a document that all franchisors are required to provide to potential franchise buyers from the start. The document is basically a set of disclosures that you need to know before you invest your money into the business. Every single thing you need to know about the franchisor, the business, and your responsibilities and obligations is in the document.
The document can be dozens of pages long and contain language that is unclear or confusing. However, it is important that you read it from beginning to end. If you fail to read it, you could be left unprepared for situations that occur between you and the franchisor. Worse yet, you could potentially lose your franchise if you violate one of the rules that are set by the franchisor.
Your attorney will review the FDD with you. If there is any information that you do not understand, your attorney can explain it. He or she can even help with condensing the information to a more understandable format, if necessary.
Your franchise attorney can further help you identify possible mistakes that could occur and give you guidance on how to avoid them.