FDD and Franchise Agreement Reviews

Buying a franchise is a substantial financial commitment. While you receive hundreds of pages of documents and usually have a short time to review and digest all the information, it’s essential that you understand your legal obligations, liability, and rights. The legal complexity and specialized terminology of the documents make it crucial to have your own experienced franchise lawyer to review the documents before you sign the Franchise Agreement. Franchise law attorney Ashley Nielsen advises prospective franchisees and provides a comprehensive review of FDDs and franchise agreements. She assists clients throughout the country who buy franchises in all 50 states.

Experience and Approach

Ashley Nielsen has spent years representing both franchisors and franchisees and drafting and negotiating changes to franchise agreements from either side of the table. Her extensive experience on both sides of franchise transactions provides her with valuable insight and a broad perspective that significantly benefit her clients who are buying franchises.

Based on her background in franchise law practice, Ashley understands the significant commitment of financial resources, time, and energy that a franchisee invests in getting a new business started. She appreciates the opportunity to serve as the trusted advisor for new entrepreneurs, who often are making a life-changing decision by purchasing a franchise. Ashley finds it very gratifying to help her clients reach their goals and establish successful businesses.

In reviewing your documents, Ashley takes a personal approach to make sure that you are comfortable addressing concerns and asking questions. She conducts a comprehensive review and explains the provisions in detail, including identifying any provisions that may pose potential issues in the short- or long-term. Ashley takes as much time as necessary to talk with you about your purchase to ensure that you are fully prepared to move forward. Her goal is to empower you with the knowledge and validation that are necessary to give you confidence in your decision.

Prospective franchisees often receive the franchise documents only a short time before they are expected to sign the franchise agreement. Ashley knows how time-sensitive this process can be and does her best to complete the review and negotiation process in 7 to 10 business days.The short timelines make it important to contact her as soon as you receive the documents. You are also welcome to contact her in advance to talk with her and lay the groundwork for the document review.

Franchise Disclosure Document (FDD)

The FDD is a disclosure document that the Federal Trade Commission requires every franchisor to provide to people who want to buy their franchises. The FDD contains crucial information about the franchisor and about your obligations, liabilities, and rights under the franchise.

Under FTC requirements, an FDD contains 23 different specific items relating to the franchisor, franchisee, and the franchise itself. Generally, the items include:

  • Detailed background and financial information about the franchisor
  • The initial fees, investment, and expenditures relating to establishment of the franchise
  • The franchisee’s obligations under the franchise agreement
  • A description of the services that the franchisor provides to the franchisee
  • Restrictions on what the franchisee may sell, as well as on sources of products and services
  • Information about the franchisee’s use of trademark, patent, copyright, and other proprietary information
  • Your rights and obligations relating to renewal, termination, transfer, and dispute resolution
  • A list of all agreements that the franchisee will be required to sign

As part of the document review, Ashley goes over each of the items in the FDD to make certain that you understand the terminology and terms stated in the document. While the Franchise Agreement is the legal document that governs your relationship with the franchisor, the FDD is also important as it provides you with information about the franchisor that is not included in the franchise agreement.

Franchise Agreement

The Franchise Agreement is the legal contract between you and the franchisor.

Ashley conducts a thorough review of all the provisions of the Franchise Agreement. Then she reviews the document with you to answer questions, explain specific provisions, and address any concerns you have.

In her review, Ashley draws on her substantial experience in drafting and negotiating agreements for franchisors and franchisees to look for provisions that may be atypical or cause potential problems. If she identifies any issues, she discusses them with you and explores options for resolving concerns about provisions in the Agreement. She also looks for provisions that may provide an opportunity for negotiation with the franchisor.

Negotiation and Amendments to the Franchise Agreement

Prospective franchisees sometimes make the mistake of believing that the Franchise Agreement is not negotiable. While not everything is negotiable in a Franchise Agreement, some provisions are. Based on Ashley's substantial experience negotiating franchise agreements, she has a good understanding of what provisions may be negotiable, and which ones are not. She knows how to focus on key issues and will not waste your time or the franchisor's time with requests that will be summarily rejected.

If you successfully negotiate a change to the Franchise Agreement, it will be accomplished through an amendment or addendum to the agreement. Ashley can help you negotiate and draft this amendment or addendum.

Schedule a Consultation

If you are buying a franchise and wish to talk with Ashley Nielsen about reviewing your FDD and Franchise Agreement, please call (919) 335-3815 or use the online contact form. Nielsen Franchise Law provides legal services to prospective and current franchisees throughout the United States and also welcomes inquiries from referring attorneys, franchise brokers, and other professionals.