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.