Franchisors who are willing to negotiate any part of their franchise agreement are by far the exception rather than the rule. In fact, the rule is something like, “what part of ‘no’ do you not understand?” Of course, there are good reasons for franchisors to stand pat (namely that they can but also to maintain the integrity and uniformity of their franchise deals) and some franchise agreement provisions are simply inviolable, like those dealing with royalties, franchise and ad fees and term. But what most prospective franchisees don’t realize is that the counterparty sitting across the table generally considers the entire franchise agreement to be, well, off the table. That’s because franchisors are unquestionably drawing up the menu and prospective franchisees generally are not even really seated.
Mike Sheehan is a franchise consultant and attorney. He is the president of Focus Ventures (www.focusonfranchise.com) and formerly served as a securities attorney and as general counsel for a Fortune 100 financial services company. His Franchise Focus Blog (www.franchisefocus.blogspot.com) focuses on helpful information, tips and current news for prospective franchisees.
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