Do I need an attorney to purchase a franchise?
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I've heard it's necessary for an attorney to review the franchise agreement, but I'd rather save the money to invest in the business.There is no hard and fast rule about needing an attorney in order to buy a franchise. There are three common sense questions you need to answer in order to determine if you need an attorney:
1. Do you understand the franchise agreement? The FTC requires that the disclosure documents and legal matters be written in understandable plain English but sometimes that doesn't seem to help much.
If you are confident that you understand what the agreement is saying then you'll be more comfortable, if not then you may want to have legal advice from an attorney to make sure your understanding is complete and accurate.
2. Is the franchise company willing to modify their contract or is it exactly the same for everyone? Many franchises will not amend their agreement for anyone--anymore than Allstate is willing to modify an insurance contract. If their agreement is exactly the same for everyone and if you understand what it says, then you may think of the expense of an attorney as wasted money.
3. How will you sleep at night if you don't involve an attorney? If you are a worrier and you'll fret about it a lot then of course it is a good use of money to involve an attorney no matter the answers to the other questions.
Do it for the peace of mind and don't worry about what it costs. Having said that, always ask for a fixed fee bid to review the documents because it may save you thousands of dollars over using an attorney who racks up the hourly fees on non-critical issues.