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Why is it important to have a franchise agreement checked by a specialist lawyer?
Franchisees often ask if it is worth spending the money getting a solicitor to review a franchise agreement when a franchisor has told the franchisee it is a standard form agreement and it will not accept any amendment to it. It is worth spending this money for the following reasons:
• A franchisor needs to have a number of controls in the agreement to ensure the uniformity of the system, quality of its products or service and the protection of its brand, so by its nature the contract will be one sided, but it should also be fair to you and the franchisor. A British Franchise Association affiliate solicitor should be able to advise you if the franchisor has got this balance right.
• The franchise agreement should specify the services you will get from the franchisor. A BFA affiliate solicitor will be able to explain the extent to which the franchisor is obliged to provide these services.
• A BFA affiliate solicitor will be able to explain to you the rights you are getting under the agreement, your obligations, any performance targets you are expected to attain, the franchisor’s right to terminate the agreement, the financial provisions and many other legal obligations that you may not fully appreciate.
• A BFA affiliate solicitor will be experienced in reviewing franchise agreements and will be able to tell you if there is anything unusual in the agreement that may require further explanation from the franchisor.
Once you understand the extent of your rights and legal obligations under the agreement you will be able to make an informed decision on whether or not to enter into the franchise. It is very important you use a BFA affiliated solicitor, as you will know that someone who has previous experience and expertise in franchising is going to review your agreement. You can get a list of affiliate solicitor members from the BFA.
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