Before Buying a Franchise

Legal Advice Prior to Buying a Franchise

Are you interested in buying a franchise in the U.S. or in a foreign market? I help entrepreneurs decide if buying a franchise is a good fit. As a potential franchisee, there are important issues to consider prior to your purchase. I provide comprehensive legal help to prospective franchisees, helping them decide if buying a franchise is a wise move.

Are you interested in buying a franchise in the Washington, D.C., area or elsewhere in the United States? Please contact me, Mario L. Herman, today to schedule your consultation. As an experienced franchise attorney, I can help you decide if buying an American franchise is a good fit.

Look Before You Leap

Due diligence is crucial for major financial decisions. Before signing a contract, securing a loan, and cutting a check, you should:

• Review the franchisor's litigation record contained in the franchise offering circular (FOC);
• Scrutinize promotional marketing materials provided by the franchisor and compare these with representations made in the FOC;
• Contact current franchisees listed in the FOC and inquire whether they would purchase their franchise again (though current franchisees will be reluctant to speak negatively about the franchise);
• Find former franchisees (sometimes a difficult task) and inquire how many left the system and why (keep in mind, former franchisees may be inclined to speak negatively about the franchise);
• Independently research the franchisor and their concept to determine the strength of their trademark, the financial performance of company-owned stores, and whether the franchisor is a "professional franchisor"—that is, a verifiable expert in the concept being franchised;
• Call the Federal Trade Commission (FTC) in Washington, D.C., to determine whether complaints have been filed against franchisor;
• Call franchisee associations (e.g., the Franchise Equity Group (619-593-6553) and the American Association of Franchisees and Dealers (800-733-9858)) for additional information; and
• Determine which attorneys formerly have represented franchisees in the network, and inquire about their client's problems with the franchise.

Learn more about the importance of putting a lawyer with franchise expertise on your side or read about franchising success rates.

Contact me today to arrange your consultation.