Myth vs. Reality

Myth #5:

Franchise agreements are offered on a take-it-or-leave-it basis.

In fact, you can and should negotiate the terms of your franchise agreement. Franchise laws in some states, such as California, make it difficult for a franchisor to negotiate any changes in its franchise offering. In that state, a negotiated change must be filed with state officials and displayed in all subsequent UFOCs. In most states, however, changing a franchise agreement is more straightforward. In fact, Virginia requires that the terms of a franchise agreement be negotiable, or the contract may be voided by the franchisee within a certain period of time.

If your attorney advises you that a provision should be changed to protect your interests and the franchisor refuses to consider the change, think hard before going ahead with the deal.

Clearing away the myths allows you to make a realistic evaluation of the investment and is an important first step on the road to franchising success.

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This article was originally published in the October 1998 print edition of Entrepreneur with the headline: Myth vs. Reality.

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