I Can Hire an Attorney to Write the Franchise Agreement; Why Do I Need a Franchise Advisor?

I spend many hours of my day talking with business owners who want to franchise their businesses and many ask me this question. As I tell them, when you want to create a franchise organization hiring a qualified franchise attorney is a crucial step. Yet, attorneys address only one piece of the franchise development process – the legal side. There is no question that this is an extremely important component of franchising. However, there are many other equally critical elements.

Competent franchise attorneys know how to write agreements that comply with Federal Guidelines and state franchise regulations, yet they don’t commonly have practical experience in running a business, let alone a franchise organization. This franchising operational and marketing know-how is indispensable to avoid costly and unnecessary mistakes.

Although heavily regulated, franchising affords you, the business owner, the flexibility to achieve your short and long term goals through this business growth vehicle. Most attorneys don’t have the practical experience to guide you in answering the business questions that must be addressed in a franchise agreement. You know your business, but initially, you lack the franchise expertise to answer these questions effectively. A qualified franchise advising and coaching firm can guide you through this process.

Here are some examples of issues that your attorney, in all probability, lacks the experience to help you answer.

  1. What type of franchise offering should you have? Should you offer single units? Multiple units and/or Area or regional development agreements? Each one of these offerings is different in operational requirements and results. Determining which one meets your goals before you write your franchise documents is critical.
  2. How much should you charge for your franchise offering? What ongoing fees should you have? A franchise advisor can help you determine these fees based on your type of business and franchise opportunity.
  3. How much training are you going to provide to your franchisees? Where and when should franchisees be trained? Who will undertake the training of new and existing franchisees? You may know what information a person needs to have to run the franchised business, but are you qualified to design the training curriculum that assures that your franchisees will have the knowledge to be successful?

The above three points are just examples of areas that need to be addressed in the franchise legal documents. If you can’t answer these questions, your attorney is likely to take the answers from other agreements previously written in your industry. These answers do not necessarily apply to your business or to your goals.

Once your franchise legal documents have been prepared, you also need to know how to market your franchise offering, how to find the right franchise candidates, how to close deals, how to train your franchisees, what type of staff you need to recruit, train and support your franchisees, and many more franchise operational issues that only someone who has been there can coach you through. A good franchise advisor is a trainer and a coach and will prepare you to deal with all these issues so you can become a successful franchisor.

During hard economic times, it is easy to justify saving money. Yet some things are too critical to cut corners. If you want to avoid costly mistakes make sure to retain the services of a competent franchise advisor or coach with the practical franchise experience to complement the efforts of a good attorney. Together, the franchise advisor and the franchise attorney can create a successful framework to allow you to meet your objectives while protecting and growing your business.