Franchise opportunities?
- Thread starter Sebastian
- Start date
All I can tell you is that you have to get someone who really knows both the law and the practicalities of the Franchise Disclosure Document to determine what you are getting yourself into. It's a bit of an art and a science to dig through those rather lengthy documents and make certain it's a good deal or not. Here's the thing, much of it is actually governed NOT by what its terms actually are (whether the Franchisee can screw you over 10 ways to Sunday) but RATHER by the simple question: "Did they disclose to you that they could screw you over 10 ways to Sunday?"
I'm sure there's some online along with some pointers. But trust me on this one, you will NEVER spend your money on something as important as having an experienced attorney review a FDD BEFORE you consider signing on the dotted line.
Lots of franchises out there who have paid big bucks to their attorney to maximize the ways they can screw you out of your money. (not all, but quite a few). I'll be honest with you, I could review those contracts for days and wouldn't likely spot all the problems and I do have a bit of experience in that area. My old firm in L.A. kept an attorney in an "of counsel" position with the firm even though she only came into the office about twice a year. Her sole job was to provide services creating or reviewing UFOC's as she had about 30 yrs experience and even had written a legal text on the topic.
I can't remember the franchise, but I remember her pointing out a couple of provisions in one agreement that basically said that the franchisor could revoke the rights of the franchisee at their sole discretion and their decision could not be challenged. When we looked a little deeper, it turns out that they had done exactly that to a couple of their more successful franchisees. They merely waited until the franchisee had built the business into producing a decent revenue stream and then took over.
I would give you the analogy: You are going to enter into a "pre-nup" with a prospective marriage partner which is going to be pretty much one-sided (theirs). If you have much $ and your future at stake, pay the money to the best divorce attorney you can find to review it. It will save a lot of problems if things don't work out.
Hollywoods posts are gold. Not looking at a franchise, but I enjoyed the post from just the perspective of gaining insight on the matter.
I got to know a Chick Fil A franchisee pretty well when my mother in law used to manage his restaurant. I got the impression that Chick Fil A corporate isn't too bad to work with, but you need to have fairly substantial personal assets to even have a chance at becoming a franchisee with them.
Stay far, far away from Subway and Steak-n Shake. Quiznos too (if they still exist).
Stay far, far away from Subway and Steak-n Shake. Quiznos too (if they still exist).
I also enjoy hollywoods posts. It's the ones like these that make me understand all those jokes about there being skid marks by the dead dog and not the lawyer.
What a scummy profession to use a certain lexicon that will either screw you or bankrupt you trying to understand how not to get screwed.
I heard the Subway franchisor makes more money on store resells than royalties.
Probably bull but that's what I was told by an ex owner.
I'd stay away from food altogether unless you like working really long hours for very small margins.