The Castle Law Firm The Castle Law Firm 2022-06-09T13:00:07Z https://www.rcastlelaw.com/feed/atom/ WordPress /wp-content/uploads/sites/1502936/2021/08/cropped-Favicon-32x32.png On Behalf of The Castle Law Firm <![CDATA[Top Reasons to Consult an Attorney Before Signing a Franchise Agreement]]> https://www.rcastlelaw.com/?p=47629 2022-06-08T16:07:49Z 2022-06-09T13:00:07Z not to sign a franchise agreement without consulting an experienced attorney to guide you through the process:
  1. Franchise Agreements Are Drafted in Favor of the Franchisor.
All franchise agreements are highly skewed in the franchisor’s favor.  Franchisors are in the position of power, which they (and their lawyers) take advantage of.  Throughout the sales process, you may be told that the agreement is fair and that there will no surprises; however, many franchise salespeople are not familiar with every element and nuance of the franchise agreement’s terms.
  1. The Franchise Disclosure Document (FDD) Does Not Provide All Relevant Information.
Some potential franchisees believe that reading the FDD will provide them with all of the necessary information about the business.  This, however, is not the case.  While the FDD offers summaries of some of the details in the franchise agreement, it completely disregards several crucial elements.  FDDs are not always 100% accurate—and most importantly, the franchise relationship is governed by the franchise agreement, not the FDD.
  1. There Are Many Pitfalls Applicable to Franchisees in Franchise Agreements.
Certain provisions of franchise agreements pose various risks to franchisees.  When considering the purchase of a franchise, you must be aware of the terms and circumstances that apply—and ensure that you are prepared to cope with them throughout the life of your franchise.  Consulting with an experienced franchise attorney can help you navigate these potential pitfalls.
  1. If You Don't Fully Understand the Ins-and-Outs of the Franchise Agreement’s Provisions, You Won’t Know If or When You’re in Breach.
Breaching your franchise agreement is a serious problem that, in some situations, might put your franchise at risk. Even minor breaches of the agreement can create massive headaches for your business—both from an operational and financial perspective.  If you do not fully understand the ins-and-outs of the many provisions of your franchise agreement, you may not realize if or when you’re in violation of its terms.  Enlisting a knowledgeable franchise attorney to serve as your guide can help you avoid potential breaches and maximize your franchise’s chance of success.
  1. Many Franchisors Are Willing to Work Out a Deal.
In some cases, franchisors will be open to rework certain provisions of their franchise agreements (at least with potential franchisees they deem to be serious/strong prospects).  Franchisors understand that their franchise agreements are one-sided, and effective franchisors will usually anticipate serious prospects requesting certain changes.  You may be able to secure important protections for your franchise investment by employing an experienced attorney to negotiate the franchise agreement on your behalf. Schedule a Free Consultation with The Castle Law Firm If you are considering purchasing a franchise within the Chicagoland area or the State of Illinois, The Castle Law Firm is here to help you understand your rights and obligations under your franchise agreement—and to make suggestions and/or negotiate with the franchisor on your behalf.  Attorney Rob Castle has extensive experience assisting franchisees throughout the State of Illinois in setting up and operating their franchise units, and helping his clients achieve their long-term business goals.  Call us at [nap_phone id="LOCAL-CT-NUMBER-1"] to schedule a free consultation or email the firm today.]]>
On Behalf of The Castle Law Firm <![CDATA[Buying a Franchise in a Post-Pandemic World]]> https://www.rcastlelaw.com/?p=47415 2022-05-20T15:14:29Z 2022-05-06T18:24:38Z considerations, prospective franchisees should contemplate their prospective franchise purchase through a unique, post-pandemic lens. Doing thorough due diligence before signing a franchise agreement can maximize your chances of success. For example, in the COVID context, one should consider:
  • How the industry, and franchised brand in particular, was impacted by COVID. If the franchisor was negatively impacted in a financial sense, is it now recovering in the region in which you plan to open your unit?
  • What, if any, measures the franchisor took to minimize the financial impact of the pandemic on its brand—i.e., did it reduce staff, cut marketing, close down units, limit training or support, etc.? How did this impact franchisees?
  • Whether the franchisor provided immediate support for franchisees when the pandemic hit and ongoing support throughout the lockdowns, including updating its training and support policies and procedures. Did franchisees have the opportunity to speak out on how they were impacted, and provide input to the franchisor?
  • Whether franchisor allowed for any financial concessions or fee payment deferrals.
  • What, if any, changes the franchisor made to its franchise model and system as a result of the pandemic. Did franchisees have a say in these adjustments? Is the franchisor using this time to re-evaluate its model and implement changes that might be a benefit based on post-pandemic customer preferences?
  • The financial data franchisor is disclosing in Item 19 of its FDD. Is comparison data being provided for pre-pandemic performance and data during the pandemic? If the franchisor provides no financial performance representations in its FDD, we advise prospective franchisees to discuss financials with existing franchisees (to the extent possible), to get a sense of their financial results from before, during, and now post-pandemic.
Request a Free Consultation with The Castle Law Firm If you are considering purchasing a franchise, The Castle Law Firm is here to help you understand your rights and obligations under your franchise agreement and franchise disclosure document (FDD), and evaluate such information through a post-pandemic lens. Attorney Rob Castle has extensive experience assisting franchisees and franchisors alike in achieving their business goals in Illinois, and nationwide. Call us at [nap_phone id="LOCAL-CT-NUMBER-1"] to schedule a free consultation or email the firm today.]]>
by The Castle Law Firm <![CDATA[Welcome To Our Blog]]> https://www.rcastlelaw.com/?p=46482 2021-10-01T19:23:49Z 2021-10-01T05:53:47Z