Franchise Attorneys: Should You Hire a Franchise Attorney?

Protection for Franchise Buyers
Once you have decided that buying a franchise is the right business move, and after you have done proper due diligence to choose a field or industry to enter, it comes time to wade through the vast amounts of paperwork supplied by the prospective franchisors.  Few people are able to do this on their own.  Don’t forget, you are making a huge investment in both time and money to buy a franchise.  Even if your only concern is in understanding the franchise agreement and other material that will legally bind you together with the parent company, spending a few thousand dollars at the beginning of the relationship could save you many times more than that during the time you spend as a franchise owner.

Finding a Franchise Attorney
There are a number of resources available to the prospective franchisee in search of legal assistance.  No matter where the parent company is located, it is important that you hire a franchise attorney licensed to practice where you plan to operate the franchise.  All legal paperwork originating at the parent company is created specifically to adhere to laws in your state, so it makes sense to have an advocate intimately familiar with corporate law where you plan to do business.  There are four basic ways to come up with a list of attorneys with experience in franchises:

  • State bar association – Some states have an online search feature that allows you to narrow the field based upon location and area of expertise.  Others offer similar services by telephone.
  • The Yellow Pages – Most listings are grouped by type of practice, so you will want to look closely at anyone listed under “corporate law” or “business law”.
  • Online directories – There are a number of Web sites, independent of state bar associations, that provide search opportunities similar to the two noted above.
  • Referrals – Often the most reliable method, be sure to check with friends, attorneys who practice in other disciplines, and business owners (including other franchisees in your area).

Finding the Proper Representation
After making a list of potential franchise attorneys, you will want to interview them to determine if they will serve your needs.  This interview can easily be conducted by telephone, as doing it that way will save both parties quite a bit of time and effort.  Here are some questions you will want to ask:

  • What are your law specialties?
    Is the attorney in general practice, or do they focus on a specific aspect of the law?  Some states prohibit attorneys from advertising themselves as a specialist in a particular area, but they should have no qualms about discussing this with you on a one-to-one basis.
  • How many franchisees have you represented over what period of time?
    If an attorney has worked in this field for some years, he or she should have an excellent grasp of the factors unique to franchising, as opposed to simply practicing basic corporate or business law.
  • Can you provide me with references?
    Although the terms and disposition of cases is subject to attorney – client confidentiality, any good franchise lawyer should be able to give you a few names to contact.  While you will not hear about specific elements, talking to former or existing clients will give you an idea of how well this attorney communicates, and where his or her depth of knowledge lies in regard to franchising.
  • What are your fees, and how are they structured?
    It is usually possible to pay by the hour, a flat fee for a particular set of services, or a combination of the two.  For example, the cost to review a franchise agreement is X dollars, and to provide a franchisee legal advice on related matters – drawing up a lease agreement, perhaps – would be Y dollars per hour.

The Bottom Line
By engaging an attorney well versed in franchise law, you will be protected against making poor business or legal decisions when buying a franchise.

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