Top 10 Things to Look for When Choosing an Attorney for Your Franchise

If you are jumping into the franchise industry, you know that it won’t be a walk in the park. You’ll be investing your time, energy and money into making your new business successful because at the end of the day, your goal is to turn a profit and ensure that everything you put on the line for is worth it. One of the best ways to ensure that level of success is through legal and financial support. And that means choosing a great attorney for your franchise business.

While you might know a number of attorneys that you think will be right for the job, franchise law requires a different skill set than what’s required to get out of a speeding ticket. To help you make the best decision for your brand, 1851 spoke with Mike Drumm—an attorney specializing in franchising—to fully understand the top thing to look for when selecting an attorney.

1. Make sure you’re working with an attorney who specializes in franchising.

It is important that the attorney you choose specifically specializes in franchising. There are many laws that are not commonly known to general lawyers that can really affect your business. In addition, this could save you time and money in the long run. A general lawyer could try and argue many parts of your agreement that will not change, thus wasting your time and money on legal fees.

2. It is better to go with an attorney that has many years of franchising experience.

If you complete the first step of finding a franchise attorney, you are off to the right start. However, as with many things, it is of interest to find someone that has many years of experience and a strong client portfolio.

3. Make sure you have a good professional relationship with your attorney.

This relationship is one that you need to trust and respect in a professional landscape. Chances are that you are going to have your hands full making sure your business is running smoothly day-to-day. Having a good, trusting relationship with your attorney is key so that you don’t have to oversee everything.

4. If you are a new franchisee, use the “drink a beer” test.

While you do want to work with a smart and reliable attorney, this is someone you need to feel comfortable enough with to speak about everything, especially if and when things go bad financially. Drumm recommends asking yourself if you can sit at a bar and drink a beer with the person. If you feel like you can, you have a good relationship. If you don’t, you might want to try and find someone else that you feel comfortable around.

5. Ask the attorney what they think about Maryland.

One aspect of franchising that many people don’t know about it the regulations put on by different states. A simple way to test the attorney’s knowledge is to ask them what they think about Maryland. Drumm notes that the attorney should almost shiver thinking about all the regulations in that the state holds, since it is known as a strict market for franchises. This is also a good way to test if your attorney will be good for if you choose to expand your franchise into different states than where they are located.

6. Ensure the attorney is in your budget.

While you don’t want to skimp on the fees that come with a good attorney, you also need to make sure that your attorney will fit into your budget while also running a business.

7. Guarantee that the attorney has enough bandwidth to accommodate your needs as a client.

Finding an attorney that has a long list of franchise clients shows their experience and capability. However, your need to look out for yourself and make sure that you will have accessibility to your attorney when you need their help. A tip Drumm notes is to make your fiscal year separate from the traditional date of December 31. If you have the option to choose when your fiscal year can end, find a time that is not common so your attorney can provide you with the utmost attention and support.

8. Ask the attorney about the franchise transfer policy.

Most franchise contracts have their local owners sign on for 10 years with the business. But in many cases, franchisees want to leave the business before hitting the 10-year mark. While this isn’t always the best decision, it is important to know what will happen if you do want to sell the franchise. It is good to talk this over with the attorney before you even sign your franchise agreement form to know your options.

9. Ask to look over Item 19 of the Franchise Disclosure Document (FDD) with a prospective attorney.

Item 19 of the FDD is one of the more confusing aspects of the FDD, but it’s a great tool to see the company’s performance financially. This could show you how knowledgeable an attorney is with franchises and help build a relationship so you are both on the same page for what you want to get out of the business.

10. Franchise a concept, not an idea.

This is a tip for a perspective franchisor. Drumm feels that it’s best for entrepreneurs to franchise their business when it’s a concept rather than an idea—it’ll be much easier to replicate, and ensure a greater likelihood of success in the long run.