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Identify the perfect franchise for you! Take our short quiz Take our free franchise quiz!

Franchise Buyers Don’t Need a Lawyer – Yeah Right!

franchise law

Okay, so I am biased. But it is a well-developed bias based on years of experience and shattered dreams. And years of hearing the same refrains: “I couldn’t afford a lawyer when I bought my franchise,” “I used the lawyer who drafted my will and he said the contract was fine,” and “I heard I would be wasting my money because the franchisor would not change the contract anyway.”

These excuses are usually first heard when I meet with a franchise owner who is now asking for advice regarding their dissatisfaction with their franchise relationship. Too late. That is, sometimes it is too late to help them.

The best time to seek the help of knowledgeable franchise counsel is when you are buying a franchise.

Here are the top 10 reasons why:

  1. Franchising is complicated.
  2. Unless you have a lot of experience buying franchises, you don’t know what to look for.
  3. If you cannot afford a qualified franchise attorney, you cannot afford the franchise.
  4. Lawyers who do not practice franchise law cannot effectively help you.
  5. Qualified franchise lawyers can educate you on the best way to search for a franchise and how to use their services.
  6. Qualified franchise lawyers start with an investigation of the franchise system and the Franchise Disclosure Document, not the franchise agreement.
  7. Good counsel can help you avoid selecting the wrong franchise.
  8. Knowledgeable franchise lawyers have resources and connections that you likely don’t.
  9. Proper negotiation of a development or franchise agreement is a matter of timing and nuance.
  10. The cost of a good franchise lawyer may not be more than 2-3% of your overall investment.

There are many other reasons, but you get the picture. Lawyers who practice regularly in the franchise arena (many of whom are members of the American Bar Association Forum on Franchising) can “read between the lines” of a Franchise Disclosure Document, know what is missing, and are able to detect a bad deal or even a scam.

The most effective use of a franchise lawyer may be taking pass on that franchise deal that could have resulted in the loss of your home, retirement fund and savings account, not to mention that loan from your mother.

Choose wisely but choose an experienced franchise lawyer first!

Jim Meaney is a lawyer with Zaino & Humphrey, LPA in Columbus, Ohio who has represented franchisors and franchisees for nearly 30 years. He is also the author of How to Buy a Franchise. Visit www.ohiofranchiselawyer.com for more information or contact Jim directly at 614.975.9876 or jmeaney@zandhlpa.com

Quantifying Yelp's Impact on the Restaurant Industry

Luca studied the effects of Yelp ratings on the revenue of restaurants and discovered several interesting findings. Studying the relationships of restaurants' revenues to their Yelp reviews in Seattle over a period from 2003 to 2009, he found a significant relationship between a restaurant’s average rating and revenue. One star’s worth of improvement on Yelp leads, he found, on average to an increase of between 5 and 9 percent in revenue. The average rating is more important than the review, as many Yelp users are overwhelmed by the sheer number of reviews on manyrestaurantpages and find it easier to consult the star rating. Luca also found two features which exacerbate the effect on revenue Yelp has. First, the more reviews a restaurant has, the more impact an increase in its Yelp rating will have on its revenue. Second, the more reviews by Yelp “elite” members, the more impact; “elite” reviews have almost twice as much impact as other reviews.

Franchise Disclosure Document for Dummies – Part 4

One key aspect of Item 12 is establishing how franchisees’ territories will be defined. This may be by zip code, population, population with certain demographics, or geographic or political markers (i.e. streets or county lines). For franchises with population-based territories, a franchisee in a busy downtown urban area may have a territory of only a few blocks, while a rural franchisee’s territory could reach for miles.