Investing in a franchise can be a great way to launch your business quickly, but it requires a fair amount of up front capital. Often, the up front costs are the barrier to access for investors, but those costs allow you to buy into an established brand, bypassing the time and money it takes to invest in building one from scratch. That’s usually a worthwhile investment, since brand recognition and demand are such an important part of early success. When you consider the intricacies of a financing agreement for a large investment like a franchise business on top of the complexity of the franchise contract itself, there are a lot of reasons to bring in a professional who can provide you with reasonable legal advice as you weigh your options.
1. Get Help Parsing All Your Contract Requirements and Benefits
Legal language is difficult for the average entrepreneur to fully interpret because it is made to be precise, and that precision requires the use of terms of art only known to those with legal training or independent research in the topic. Hiring a lawyer is usually cheaper and faster than learning everything you need to know about contract language from scratch, so you can be sure you are fully informed before entering into a franchise agreement. That’s the biggest benefit of having a franchise contract lawyer on your team.
2. Negotiate Clarifications To Vague Contract Points
You might think that franchise agreements are non-negotiable, especially for brands that can pick and choose which applications they accept. While most of the terms are the same for each new investor, unclear draft language can be an issue, and a lawyer is trained to find it and to request rephrased terms that are easier to parse without ambiguity. This is very important if you’re to avoid conflicts down the road. For the points of the contract that are negotiable, a lawyer is best positioned to negotiate on your behalf.
3. Locate Hidden Penalties and Fees in Financing Agreements
Franchise financing agreements are their own specialized form of lending, and having a lawyer who focuses on your business model and the law around it can help you find your best deal when you need working capital. That could save you money in the long run.