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If a franchise agreement is non-negotiable, why do I need a lawyer to review the document?
Franchisors generally say their franchise agreement is non-negotiable. There are a number of reasons for that.
First, they have spent a great deal of money having the agreement prepared and do not want to spend more money negotiating its terms with each franchisee.
Further, it would be an administrative nightmare if every franchisee was on different terms, which would cause consternation within the network when franchisees found out others had negotiated better terms than them.
Having said that, certainly in the early stage of a franchise network, it may be that franchisors are flexible and if your lawyer points out clauses that do not work, your prospective franchisor is likely to want to amend its franchise agreement.
The real reason why you need a report from an expert franchise lawyer is that you need to know if the agreement you are being asked to sign is unusual, unfair or unworkable. Franchise reports can be obtained for as little as £400 and in view of the size of most franchisee’s financial commitment and commitment in time and energy, is a small price to pay for peace of mind.
John Pratt is senior partner at specialist franchise firm Hamilton Pratt and has advised franchisors for over 25 years.
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