When preparing to purchase a franchise, there are a few things you’ll want to do prior to signing any documents. First, you’ll want to talk to several other franchisees to get all your questions answered and work on drawing up your business plan. If possible, you may even want to consider visiting the franchise headquarters.
Even after doing all you can to prepare and learn as much as you can, there is still one big thing left for you to do: protect yourself legally. In order to do this, you’ll need to hire a franchise lawyer NYC. Here are four reasons you need an attorney to help you with this last step.
Lawyers Know What Matters Most
By law, all prospective franchise owners are required to receive the Franchise Disclosure Document (FDD) prior to completing the purchase of a franchise. Within this large document, anywhere from 150-300 pages will be information covering everything the Federal Trade Commission (FTC) feels is imperative that you know about the franchisor. It is imperative that you completely understand the intimate details of this document as there will be certain restrictions and obligations that you’ll have to abide by, otherwise you could be terminated.
A franchise lawyer will know exactly what you need to focus on when reviewing the FDD and the actual franchise contract. Chances are, most attorneys have written an FDD themselves, so they know what to look for when reviewing one. They will also be up to date on all the current, ever-changing franchise laws that you might not be aware of.
Advise You on Choosing a Business Entity
Along with providing valuable information regarding the FDD, a franchise attorney will also be able to provide you with suggestions on how to best set up your new franchise business. Is it going to be in your best interest to establish a Limited Liability Corporation (LLC)? A Subchapter S-Corporation? Or a C-Corporation? Do you know the difference between corporations well enough to make the decision yourself? It is going to be crucial to select the right entity for your new franchise, as it will determine your legal rights and liabilities as a business owner. Additionally, the type of corporation that you establish will also determine how your business is taxed.
Provide Assistance if Things Go South
When people buy into a franchise, they don’t do so expecting to fail. Unfortunately, unseen circumstances may arise making it hard for you to succeed. In some instances, you may be forced to close your business. In this case, having a franchise attorney can prove to be beneficial.
Franchise Development Claims You Don’t Need One
A franchise is going to have their own best interest at heart, which is why if they ever tell you that you don’t need an attorney, ignore it. Because the FDD is a lengthy, complex document they have the sole objective to get it signed without any negotiation. This is because most franchise development directors are salespeople, whose sole objective is to get the agreement signed. This is where having a lawyer who understands these types of documents can advise you on negotiating prior to signing anything.
Before purchasing into a franchise in New York City, hire a franchise lawyer NYC, such as Warren S. Dank, ESQ., P.C., to protect you and your interests. With years of experience, you know you can trust Warren S. Dank with all your franchise transaction needs.