This advice may sound unconventional or unusual, but it holds great weight for any individual, no matter their status or situation.
It’s quite short and simple, it’s a wonder schoolboys aren't shouting it at recess.
“Tell your lawyer the truth.” Feed him bad facts and in turn, you will receive bad advice. Trust him and share the honest facts
and in turn, you will receive honest and good advice. Bad facts will get you nothing but bad advice.
The worst that could happen when you offer complete transparency to your attorney is disliking his advice. If you dislike their advice, just go to another attorney and tell him a different story in hopes of getting what you seek.
Get the advice you want, and take your chances...
Remember, good facts warrant good advice, bad facts warrant bad advice.
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Unless you can afford to buy McDonald's, Burger King, Dunkin', etc., you are almost certainly going to lose your money and be completely disillusioned. First and foremost, you need to understand the real money is in selling the franchise; not in operating one.
Secondly, buying a franchise is not a consumer purchase. Laws and regulations protecting you are few, and the laws are not self-executing, meaning you need a lawyer to enforce your rights once you buy the franchise. Just because the FTC (Federal Trade Commission) has regulations doesn't mean the franchisor will follow them. The laws and regulations mean nothing unless you have the money to pay a lawyer to enforce them. The answer is don't buy the franchise if you can't afford to pay a lawyer and a CPA to protect you. No franchisor draws a franchise agreement which is fair to itself AND its franchisee. And, if you sign a business deal, the law will treat you no differently than if you were Microsoft or Apple. That is, you are expected to read, understand and negotiate your deal. The law will not treat you as a consumer having done business with a large company. If you sign a contract of "adhesion," you will be held to it.
Thirdly, any royalty you pay comes from what would have been your profit. This puts you at an immediate financial and competitive price disadvantage to the true self-employed entrepreneur. Consider how much more expensive it is to eat at a chain restaurant than a locally owned one, and how much more "corporate" food is at a chain. Your products and/or services will cost more, unless it's an "enterprise" business of scale.
You will be required to buy products, services, promotions, advertising, equipment, and supplies from your franchisor, often at marked up exorbitant prices again putting you at a disadvantage.
This is only a speck or dot of information. You need to know what you are buying, for how long and for how much; are you personally liable or is only your company liable for debt? Are you free to relocate? Sell? Will the franchisor be competing with you? Can it dilute your territory? Raise the royalty? Assess additional charges? Charge you for its legal fees? Protect you against patent and copyright infringement? Drive business to or away from you? Allow you to pass the franchise down to your children?
Have you personally spoken with other franchisees? Inspected their books? Checked for lawsuits? Ratings and reviews? Worked at another franchise operator's location? Put together a spreadsheet of income and overhead? Do you know the cost of acquiring a customer or client?
Do you know how many sales you must have a day or a week just to stay in business?
Most franchise buyers lose everything. They sign anything put in front of them without the benefit of a lawyer, a CPA, or even business classes. With how many franchisees have you spoken? How many lawyers have you called? How many CPAs have you called?
It would take me 3-5 hours to finish this mini-article. Before you spend one dollar, talk to 20 people who've purchased franchises. It's free.