Ignoring This Franchise Advice Could Ruin A Biz


A couple of years ago, I gave advice to someone acquiring a franchise from a U.S.-based franchisor, and the deal went wrong because the parties hadn’t dealt with the issue of withholdings tax.

When I advise franchisees, I dole it out in two phases.

Phase One involves reading the documentation in its entirety, commenting on it and advising the client about what is normal for that kind of agreement, what is not, and what is “off the wall.” I provide some guidance on what can be negotiated and what normally can’t. And I can usually predict what the costs will be for the advice, because I’ve done it before.

If the client wants to hire me to help negotiate the agreement beyond the advice provided, I move to Phase Two, and there are various levels of contact I might have with the franchisor or its lawyer in these “negotiations.” Continue reading this post.

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