SC Franchise Agreement Lawyers in Myrtle Beach

Do you need to hire a SC franchise attorney before entering into a franchise agreement?

Yes. Yes. Yes.

For many reasons, not the least of which are: 1) You do not want to be taken advantage of; and 2) You want your business to succeed.

The franchisor employs top attorneys to draft their franchise agreements and to litigate disputes with franchisees – don’t risk your future and the future of your business on the fair-mindedness of attorneys who are paid to protect the franchisor.

You will need a franchise attorney in SC:

  • To review and explain the franchise disclosure document (FDD);
  • To review and negotiate the terms of the franchise agreement; and
  • To ensure that you choose the correct business entity.

First, a franchise is a business – in addition to the special considerations of purchasing a franchise, you want to make sure that the business is set up correctly with detailed operating agreements or partnership agreements, that you have well-drafted contracts in place for any goods and services, and that you have a business succession plan in place.

Franchise Disclosure Agreements (FDDs)

Franchisors are required to provide you with a franchise disclosure agreement (FDD) which is a lengthy document that contains important information about the franchisor that you will need to know before deciding to enter into a contract with them.

The FDD is mandated by the Federal Trade Commission (FTC), and includes restrictions and obligations that will apply to you as a franchisee and that could result in termination of your business relationship or penalties if they are not followed.

You must read and understand the FDD before deciding to go through with your SC franchise purchase, and you should always have your SC franchise attorney review the FDD with you.

Can I Negotiate the Terms of My Franchise Agreement?

The franchisor may tell you that you do not need a franchise attorney – the agreement is non-negotiable, anyway…

Get a franchise attorney to review the agreement. Although it is true that some franchisors are more difficult than others when it comes to negotiating terms, some of the contract terms may be negotiated.

Others may be unconscionable and justify a decision to choose a different franchise if they cannot be negotiated. Consider this - if the franchisor is attempting to force you to agree to terms that are clearly one-sided, how are they going to treat you once you are in business with them?

Some examples of franchise agreement terms that should be negotiated or clarified include:

  • Personal guarantees: You may be required to sign a personal guarantee – that is not out of the ordinary. But, some franchise agreements may go too far. Should your investors also be required to provide a personal guarantee? Probably not. Should family members or a spouse also be required to sign a personal guarantee? No.
  • Non-compete clauses: Are you willing to agree to limit your future business opportunities in exchange for the franchise agreement? It may or may not be reasonable depending on the circumstances.
  • Vague terms in the contract or verbal promises: When the agreement or the salesman uses language like "the franchisor will provide necessary support to the franchisee," "proprietary methods or products will be made available," or any other language that is vague or ambiguous, you will need to seek clarification before agreeing to the transaction.
  • Limitations on your legal rights: The franchisor may require you to agree to an arbitration clause which prevents you from filing suit against the franchisor, require you to pay attorney fees in any dispute, or severely limit your statute of limitations for filing claims. In general, franchise agreements will attempt to take away all your rights while protecting all the franchisor’s rights – some of these terms may be negotiable, and, if not, they might be good cause to turn down the contract…

Got Axelrod?

Before entering into any franchise agreement, contact your SC franchise attorney at Axelrod and Associates and make sure that you are protected. Call today at 843-353-3449 or complete our contact form to set up an initial consultation to find out how we can help.