Home | Legal | Franchisees: Another horror story
Lesson: Get a lawyer to represent you or your problems will likely end up like this Quiznos franchisee.

Franchisees: Another horror story

Stories like the one on QuiznosSucks.com make me sad because they could have been prevented if a franchise lawyer was representing the franchisee during the transaction. QuiznosSucks describes a father’s ordeal with Quiznos and all the “unanticipated” problems with parking, protected territory, equipment installation, leases, misrepresentations, location selection and support. Could those problems have been forseen? Yes, they all most likely would have been avoided or mitigated if a lawyer were representing Mr. Sauls throughout the process.

The story illustrated the importance of having a knowledgeable lawyer looking out for your best interests during the ENTIRE franchise purchase (not just look over a lease). Lawyers have an ethical obligation to look out for you, and if they don’t, it is easy to sue them for damages and they can loose their license to practice law. “Consultants”, on the other hand, will provide you little legal recourse against either the consultant themselves or the franchisor.

Part of the expense of buying a franchise must include competent legal representation working for YOU (not the franchise). Don’t sign or pay anything without consulting with hiring franchise lawyer. I find it amazing that people will mortgage their house, commit their life savings to their dreams, and yet try to save a few bucks by not having a lawyer represent them every step of the way. There is reason sophisticated business folks have lawyers negotiate and handle business transactions.

Problems are going to happen in the franchise relationship. Some will stem from the Franchise Agreement but won’t rear its head for a few years (like the franchise changing their mind and opening up another one down the street from you). Franchisors will say something you rely on and interepret as a promise, but in reality it is not enforceable even if its in writing.

It’s worth repeating again -> if you are going to buy a franchise, you need legal represenation to look out for you best interests. Just read Mr. Sauls story at QuiznosSucks if you think buying a simple franchise like a sandwich shop should be problem free.

Some franchisees are suing, but you usually can avoid entering into bad relationships with more due diligence on the front end.

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.
3 comments
anonymous store manager
anonymous store manager

This story is being lived out by at least half of the current stores. The top two stores in the minneapolis market are just as unhappy as anyone. This is a company only concerned with selling franchises. They could care less if you make a penny at owning a store. They must have a whole crew of people figuring out how they can make more money off of us at every angle. When TEA went national it went from $8.00 for 50 packs to $50.00 for 36 packs. Who do you think gets teh extra $42.00? We have to sell Aquafina water purchased through pepsi for $10.00 a case. When the local grocery store sells it for $4.99. Do you think the grocery store paid $10.00 a case to sell it for $4.99 I don't think so. They have you read the mcdonalds story so you have the impression they are a stand up company and would not take KICKBACKS. I can not think of anything we have that you could not buy cheaper if you were a mom and pop store. They mandate you buy soap and cleaning supplies through them that if you bought as a mom and pop store you could get for $10.00 a gallon cheaper. The ways they make money off us is endless. They have pulled the wool over the eyes of some very smart people. People who just could not imagine anyone taking advantage of them like Quiznos can. You go in an Honest hard working person thinking your both on the same side. And that the more money you make the more they make off your royalties so why wouldn't they want you to do good. They are not partneres of yours once you sign that agreement. THEY OWN YOU. and will dictate everything you could ever imagine. Thats why almost noone buys a second store. We had one store close and they had a hard time GIVING it away.

Trackbacks