Saturday, May 8, 2010
Avoid the Pitfalls of Franchising--the UFOC
Even someone who is not entirely business savvy can take steps that increase the chances of having a successful franchise. Sadly, many franchisees wait until they are in mid operation perhaps years after having made a heftly financial commitment before they do the legwork that is usually far less costly when performed up front. Some of the lessons learned come from reviewing numerous cases that have gone awry. Franchise lawyers can be an excellent source of information of what to do and not do prior to the purchase of a franchise. One activity that is essential is careful review of the Uniform Franchise Providing Circular (UFOC). It is important to review the entire document. Some of the key provisions may be in small print or in provisions that may not provide good guidance as to the content in the subject line header. Other provisions may appear obvious, but require clarification by a legal professional who is experienced with franchising. Thinking that you know something when you do not could be as dangerous as proceeding without even looking. It is highly unlikely that any franchisor would proceed without documenting the provisions that take care of their brand and business. A franchisee should make sure that he or she proceeds in a like manner making sure that his or her interests are also protected.