Under no circumstances should you hire or rely on guidance from a non-attorney for an FDD or franchise agreement review.

In fact, a non-attorney who takes your money in exchange for reviewing and providing guidance on a franchise agreement may be engaging in the authorized practice of law – a crime in many states. Franchise agreements contain often hundreds of pages of detailed legal rights and obligations governing the franchisee-franchisor relationship. An attorney that specializes in franchise law is needed to provide meaningful guidance that you can rely upon. 

The legal provisions contained in franchise agreements are substantial and typically include, among others:

• Substantial limitations on the franchisor’s obligations
• Franchisee territorial rights
• Franchisor training obligations
• Franchisee fees, including for example royalty fees, marketing fees, fund fees, and technology fees.
• Substantial termination fees
• Broad restrictive covenants, including non-compete provisions appliable to you and oftentimes extended family 
• Non-reliance on statements outside the FDD
• Early termination penalties 
• Operating standards
• Insurance requirements
• Marketing requirements
• Franchisor inspection and audit rights
• Limitation on franchise renewal rights
• Franchisor enforcement rights, including arbitration provisions waiver of jury trials
• Personal guarantees by franchisee owners

Likewise, FDDs contain substantial disclosures that are required by the Federal Trade Commission (FTC). Specifically, the FTC has a Franchise Rule that requires franchisors to provide all potential franchisees with a disclosure document containing 23 specific items of information about the offered franchise, its officers, and other franchisees. You can obtain more general information about the Franchise Rule here. 

Contrary to what a franchisor, franchise broker, or non-attorney may tell you, there is nothing cookie-cutter about an FDD or franchise agreement. Our experienced franchise attorneys will help spot red flags in an FDD and franchise agreement and, if appropriate, assist in negotiations. 

What does a FDD and franchise agreement review entail?

It includes one of our experienced franchise lawyers: (i) reviewing and analyzing the relevant sections of the FDD; (ii) conducting a deep dive call with you to provide detailed feedback and recommended due diligence (usually 2-3 hours long); (iii) providing you with a video/audio recording of the call; and (iv) providing a detailed due diligence checklist. On your call, one of our experienced franchise attorneys will:

• Review the FDD and franchise agreement, excluding only inapplicable addendums.
• Highlight and explain the most important FDD disclosures and franchise agreement provisions.
• Highlight legal and business concerns.
• Highlight any non-traditional and unfair provisions in the franchise agreement.
• Ensure you better understand the franchise investment’s pros and cons and provide detailed
  recommendations for additional due diligence.

We also provide meaningful feedback on the business side of the transaction so you can make a more informed decision before investing.

Please be aware that some law firms merely provide a high-level summary of your rights and obligations. But how is a summary helpful when you can and should read the FDD and franchise agreement yourself?

We do much more than merely summarize what you could read for yourself. We act as your legal counsel to provide detailed guidance on whether a potential franchise opportunity is a good business opportunity, what due diligence you should perform, and which franchise agreement provisions should be negotiated. Upon request, we also negotiate on your behalf.

Contact us for information at 1-877-858-6868 or coordinator@caklegal.com.

What is the cost for an FDD and franchise agreement review?

We generally charge a flat fee for FDD and franchise agreement reviews. The amount of the flat fee depends on the length of the FDD and franchise agreement and the franchisor industry. Extra charges may apply if requesting expedited services or after-hours or weekend calls.

Our flat fee and hourly rates are competitive. We do not, however, try to be the “cheapest” option. Our franchise attorneys are some of the most experienced and credentialed in the nation. We are retained by prospective franchisees who seek the best value for their legal services. 

What is the process?

Send us a copy of the entire FDD packet. We will provide you with the proposed flat fee. After being retained, we schedule a recorded call for about one to two weeks later. We may be able to provide expedited services for an additional cost.

Why work with the franchise attorneys at Cantrell Schuette?

Cantrell Schuette is a recognized leading law firm for representing franchisees and distributors in the US and internationally. We have a franchise lawyer practice group with attorneys who dedicate much of their career to protecting and advocating for aspiring and established franchisees. We provide guidance on virtually every type of franchise issue and dispute. We have over two combined decades of experience in franchise law, including successfully handling many trials and arbitrations. We are actively involved in franchise and dealer associations. 

Our franchise attorneys attended top law schools, graduated in the top of their law class, have many years of franchise law experience, and continually provide continuing education to industry insiders and even other attorneys on franchise-related topics. Our best accolade is that we have been hired and rehired by hundreds of franchisees across many brands. 

How long does it take to obtain an FDD and franchise agreement review? 

After we are retained, we generally schedule a deep dive call for about one to two weeks later. We may be able to provide expediated review services for an additional cost. 

To speak with one of our franchise attorneys, call us at 1-877-858-6868 or email us at coordinator@caklegal.com