Contrary to popular notion, when it comes to the law what you don’t know can hurt you!
- The law presumes the parties have read and understood the agreement which they have entered into.
- The law will not rescue a party from making a bad bargain in the absence of fraud or overreaching.
- Unless a contract’s terms are contrary to stated public policy, they will generally be enforced by a judge or arbitrator.
Read all of the disclosures provided to you. Among other things, they should inform you about:
- The backgrounds of the franchisor and its key people
- The nature of past litigation within the system
- Initial fees, continuing costs and projected working capital needs
- Contractual obligations of both you and your franchisor
- Whether you can rely upon any financial performance information you may have obtained
- Whether your territory is protected, and what you may have to do to maintain it
- When and how your relationship can be terminated, and what happens if it is terminated
- Any restrictions upon you after termination or non-renewal
American franchise law comprises a unique blend of both federal and state laws, rules and regulations. You should seek out and consult with an attorney experienced in franchise law before entering into a franchise relationship.