Last Minute Considerations Before You Sign the Agreement

The old adage There is many a slip between the cup and the lip comes very true when you are in the market to buy a franchise. You may have followed all the steps during the due diligence process and asked all relevant questions to your franchisor on the discovery day. But still there are some more things that you should consider before you sign the franchise agreement. Here are some of those:
• Read the franchise agreement once more (or even more than once) and try to understand each and every point. Make sure that you have hired a franchise attorney to look at the agreement and not any lawyer who is acquainted with “business law”. Taking a franchise attorney in your team means having a person who understands the legal terminologies that are there in the franchise agreement. He can point out the potential minefields, which can create problem for you later on.
• Understand the section that specifies the support you are going to get from the franchisor when you buy a franchise from it. Don’t get lost into the complexity of the words; make sure the support system is spelled out for you. Avoid franchisors that give vague statements.
• Understand the “Acknowledgment” clause very well. It is the clause that states the fact that no representative of the company ever told you anything that was not written in the UFOC or the franchise agreement. So, before you sign this, just go through what the representatives of the company whose franchise business for sale offer you are considering told you. Now compare them to what is written in the UFOC and franchise agreement. If you find any discrepancy, clear that before you sign the agreement.
• Similarly, consult the section 19 of your franchise agreement. His section contains the earning claim given by the franchisor. It doesn’t make a promise that you are going to make such a profit; rather it gives an estimate of earning that a current franchisee is earning from a franchised unit. Make sure you have an accountant in hand who can decipher the figures given in the section.
• Don’t forget to talk to the people in charge of the franchise business for sale. Observe how they answer your questions to judge their capability and knowledge about the business. Remember, you have joined the franchise business because of the extensive support that comes from the franchisor. If you think that the people managing the company is not up to the mark, then reconsider your decision of starting a franchise of the company.