Buying A Franchise or Looking to Franchise Your Business?
Purchasing a franchised business provides entrepreneurs with access to a proven business model they can replicate with the help of a franchisor delivering comprehensive training and support. In the United States, the offer and sale of each franchise is regulated through the federal Franchise Rule and often supplemented by state law. If you are launching a franchise or purchasing a franchised business, it is critical that you understand your legal obligations and the costs involved.
The Waldrop & Colvin law firm offers clarity and predictability with a flat fee model so franchisors and prospective franchisees can manage their legal fees effectively.
Waldrop and Colvin Support Franchisees and Franchisors
Franchisors and franchisees serve different functions, but they both have legal needs that require support from an attorney well versed in the intricacies of franchise law. Because we are a franchise focused law firm we are able to offer many services for a flat fee.
Flat Fee Franchisor Lawyer
The first step in the process of offering franchise opportunities to others is to create a franchise disclosure document (“FDD”). The FDD contains a series of in-depth disclosures and contains a copy of each contract between the franchisor and franchisee. Developing the FDD often requires a collaboration between legal and business leads. A substantial time commitment is required. Understanding attorney fee structures is crucial when planning to franchise. One option that stands out for its clarity and predictability is the flat fee model. Another option is the subscription model. Both approaches simplify budgeting for legal costs, allowing business leads to focus on launching the franchise.
Flat Fee Franchisee Lawyer
The first step in the process of purchasing a franchised business from a franchisor is receiving the FDD. The FDD contains a copy of the franchise agreement, the contract governing the relationship between franchisor and franchisee. Understanding the legal and business terms of the FDD is an essential part of conducting due diligence. Franchisees should also understand fee structures so they can manage legal expenses effectively. Entrepreneurs often prefer to the certainty of a flat fee model.
Navigating the Cost of Franchise Legal Services
Legal costs are important to consider when launching a franchise or buying a franchise opportunity. How you are billed can impact the total investment you make in legal support.
Fixed Fees Vs. Hourly Rates: What's Best for You?
Deciding between fixed fees and hourly rates often depends on the specific needs of your own business. Law firms who represent franchisors and franchisees may offer both options, but your choice should hinge on the predictability of costs and the nature of task at hand.
Hourly Rates for Franchise Lawyer Fees: The Traditional Approach
Law firms traditionally bill by hourly rates, especially for complex legal matters. This method can be suitable for cases with unpredictable lengths, but it often leads to uncertainty in legal costs. One downside of the hourly approach is that clients may find themselves anxious about the growing expenses with each task presented. However, it is also true that not all client’s need as much assistance and the traditional approach is necessary in some cases. We offer hourly support as well, but the vast majority of our clients prefer the fixed fee or subscription model.
Waldrop and Colvin: A Fixed Fee Franchise Lawyer Option
The law firm of Waldrop & Colvin stands out by offering a fixed fee option for prospective franchisors to use to create an FDD and for franchisees to use when reviewing a franchise disclosure document. This approach brings predictability and transparency to your legal expenses, making it easier to budget and plan for the future of your franchise. Clients can rest assured knowing exactly what their legal representation will include and what it will cost from the start.
Fixed Fees Vs. Hourly Rates: What's Best for You?
A flat fee for FDD creation or review offers clarity and simplicity in an area governed by complex regulations, including those set by the Federal Trade Commission and franchise registration states like California, Virginia, Maryland, Rhode Island, New York, North Dakota, South Dakota and Washington. We believe this transparency is invaluable for prospective franchisees.
What Does the FDD Creation Process Entail?
The first step to franchising is to develop a franchise disclosure document. We consult with prospective clients and quote a fixed fee once we learn more about their business. Next, we work with the franchisor business leads to understand the franchise system and draft a disclosure document tailored to their business. After the FDD is issued by us, we take the steps required to ensure a franchisor can do business in each state where they would like to offer franchises as laws vary by state. Throughout this process we educate our clients on the legal aspects of franchising.
Is ongoing legal support required for franchisors?
Creating the FDD is the first step, not the last step to franchising. Franchising requires constant legal support as each prospect is disclosed, franchise agreements are negotiated, and the disclosure document is updated. All franchisors need a certain level of support which will increase as a franchisor grows in size. Franchisors can engage counsel to provide legal support under the traditional hourly rate model, or they can retain counsel who offers unlimited legal support at a fixed rate through a recurring subscription model.
What Does the FDD Review Process Entail?
An FDD review on a fixed fee basis includes our legal review and analysis, a written report, unlimited consultations, and assistance in managing negotiations with franchisors before signing the franchise agreement. This comprehensive approach ensures that franchisees understand every aspect of their agreement, providing a solid foundation for their business venture.
Comprehensive Franchisor legal support explained
Our comprehensive FDD development and general counsel services ensure thorough legal support from launch to maturity through unlimited consultations, crucial legal advice, and transactional support.
Key Components of Franchisor Support
Franchisors commonly need an attorney to draft the FDD and its contracts, apply for and obtain state registration, maintain compliance, negotiate and manage contracts with franchisees, vendors and partners, manage relationships, and provide ongoing legal support.
Understanding the level of support
Our services are tailored to our client’s needs. It is important that franchisors find an attorney who is well suited to deliver legal solutions. Many law firms offer fixed fee or subscription rates for franchisor clients, but many do not include key services like contract review and negotiation or provide any degree of support in dispute resolution. Our attorneys have transactional and litigation backgrounds, so we can offer broad support. It is also important that flat fee attorneys are prompt and accessible – this is an area where Waldrop & Colvin excel.
Duration and costs of franchisor support
Clients have different needs and expectations. Creating the FDD can take between 3-12 months, depending on the client’s needs and budget. Some client’s cannot commit to a lump-sum payment or prefer to spread the cost of preparing the FDD across monthly installments. After the initial FDD is created, legal support is an ongoing occurrence.
Frequently Asked Questions About Creating an FDD
Our fixed fee and subscription model covers frequently asked questions about franchising, disclosure and advertisement obligations, and the franchise relationship. We empower clients with the knowledge they need to mitigate risk and maintain compliance.
Comprehensive Franchisee legal support explained
Our comprehensive FDD review services, offered at a fixed fee, ensure thorough legal support, from unlimited consultations to crucial legal advice before signing the franchise agreement. This approach provides franchisees with the clarity needed to make informed decisions.
Key Components of Our FDD Review
Key components of our FDD review include an in-depth analysis of the disclosures made in the FDD, franchise agreement and strategic advice, all for a fixed fee. This ensures that each franchisee is fully prepared before signing the franchise agreement. We present our review and analysis of the basic legal terms on a comprehensive report delivered to our clients. We offer changes and suggestions and work with franchisees to achieve their goals and objectives.
Understanding the Franchise Agreement within the FDD Review
Understanding the franchise agreement is crucial during the FDD review process. The franchise agreement is the contract that will govern your rights and obligations during the term which is often as high as 10 or 20 years long. Our services include a detailed analysis of the agreement’s terms, helping franchisees grasp their rights, obligations, and the implications of their commitment. We present issues in a clear format and consult with you.
Duration and Costs: Setting Expectations for the FDD Review Process
The duration and costs of the FDD review process are made clear from the outset. Our fixed fee model ensures that franchisees know exactly what to expect, both in terms of the comprehensive legal support provided and the total cost involved, before signing the franchise agreement. We are accessible and can often review the FDD and schedule a meeting within 3-5 business days of our engagement.
Frequently Asked Questions About FDD Review
Our fixed fee model also covers frequently asked questions about franchising, the franchise purchase process and the ongoing franchise relationship, providing franchisees with the knowledge they need to navigate these processes confidently.
Adjustments to the Franchise Agreement: Feasibility and Process
Adjustments to the franchise agreement are often necessary to better protect the interests of the franchisee. Our comprehensive review process identifies potential areas for negotiation and modification, ensuring the agreement aligns with the franchisee’s best interests. Of course, not all franchisors will agree to modifications or engage in negotiations.
Inclusion of Franchisor’s Lawyer Communications in Fixed Fee Services
Our fixed fee services include communications with the franchisor’s lawyer, ensuring that all negotiations and adjustments to the franchise agreement are handled professionally and effectively. Business leads often negotiate the business and legal terms; however, the written contracts must reflect the parties agreement. Our assistance provides a seamless and comprehensive legal support system for the franchisee.
Beyond The FDD: Additional Legal Services on a Flat Fee Basis for franchisees
Our legal services extend far beyond reviewing the FDD to include fixed fee and hourly options for forming a corporation or limited liability company, drafting agreements, negotiating lease terms, and establishing strategic partnerships. Our franchise lawyers often provide comprehensive legal support for franchisees, ensuring their businesses are set up for success from launch. Likewise, if you do not need a comprehensive FDD review we can tailor our fees and services to meet your needs.
The Role of a Franchise Lawyer in Your Business Success
Lawyers play a critical role in your business success, helping to buy and sell, employ talent, navigate disputes, and maintain the integrity of the franchise business. A seasoned attorney is crucial in guiding franchisors and franchisees through the legal landscape, protecting their interests, and fostering growth. At Waldrop & Colvin, we are the law department for your business and we want to be your go-to lawyers from launch to maturity.
Flat Fee Franchise Lawyer Quote
Think you may benefit from a flat fee or subscription approach to your franchise legal needs? Our pricing is upfront and transparent. Just let us learn a little more about your needs during a free 15-minute consultation.
Meet the Author
Derek A. Colvin
Derek is a graduate of Penn State Law and Old Dominion University. He started his legal career in public service as a prosecuting attorney before entering private practice. He currently serves business clients as a partner at Waldrop & Colvin, the law department for your business. His practice focuses on SMB client legal services and franchising.
Derek is laser-focused on delivering efficient and effective solutions for business legal needs. As a seasoned litigator set on thinking critically and communicating effectively, Derek is well-suited to advise and protect your business as an independent owner, franchisor, or franchisee.
Derek A. Colvin offers a free 15 minute consultation.
You can call or email Derek Colvin directly or you can schedule a video conference today!
