Reviewing Disclosure Statements
You’ve decided to start a business, but you don’t have the right experience, so you chose a franchise. You’ve talked with the franchisor and they’ve delivered to you a franchise disclosure statement that’s over a 100 pages long. We can review the entire document including the various franchise agreements and advise you about: costs, operations, whether the document is complete, obligations, licensing, leases, future funding, systems, training, etc. We provide you with our recommendations and advice on what you may be able to negotiate and how to negotiate. We report our findings to you in writing. Hire a lawyer to review these documents properly. Do not settle for just a translation.
We’ve represented many prospective franchisees including some of the biggest brands such as Tim Hortons, St. Louis Bar and Grill, and Pizza Pizza.
Executing the Various Franchise Agreements
After receiving the disclosure statement, you’ve decided to proceed with the purchase of a franchise location. You’re negotiating and preparing to sign the various agreements such as the franchise agreement, the sublease, indemnities, etc. There’s still a lot of work to be done.
You will need to set up a corporation and structure it properly. You will likely have partners and you will likely need a shareholder agreement to anticipate and resolve future problems between you and your partner. We can help with this. Please see our Business Law section for more details.
For the franchise itself, we can make sure that the agreements presented to you by the franchisor are consistent with the disclosure document. We can review documents that may not have been available at the time of disclosure such as a head lease and advise you about your rights, potential surprises and any additional financial obligations contained in these documents. We will also advise you with respect to your relationship with other parties including: the franchisor, government authorities, your commercial lender, your employees, your suppliers, your customers and your landlord. We work hard to stay updated on franchise law. See our newsletters here.
Buying and Selling an Existing Franchised Business
You’ve been operating a franchised business and now you want to sell the business. We can help. Selling a franchise is complicated. We can help you deal with the franchisor. We can help you review the franchise agreement to make sure your transaction is structured appropriately. We can help you deal with your landlord. Hire a lawyer to make sure that you’ve covered all your bases. Be aware of your obligations and liabilities - some of which may not appear until after you complete your sale. Don’t be surprised and don’t allow yourself to be exposed to more liability than necessary.
We can help you purchase an existing franchise. We complete due diligence by completing necessary searches, reviewing the lease, reviewing the franchise agreement and reviewing all other material agreements. We can negotiate, review and draft the agreement of purchase and sale and prepare all closing documents. See “Buying and Selling Assets of a Business” in our Business Law section for more details.