Many individuals who decide to go into business for themselves are choosing to purchase a franchise instead of inventing a new concept. By doing so, they greatly reduce the risk of failure in return for paying a relatively small franchise fee and royalty obligation. Entrepreneurs pursuing this route typically need help in the review of the franchisor’s Uniform Franchise Offering Circular (UFOC) and franchise agreement, as well as commercial lease and other agreements attendant to any new business. While franchisors typically do not like to alter their franchise agreements for a single franchisee, it is important for prospective franchisees to understand all material risks involved and in certain cases, demand that a provision be revised. For example, we have found that some franchisors require that the owner of a corporate franchisee personally guaranty all franchise obligations, including franchise/license fees that continue even if the franchisee is forced
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to close due to insufficient sales. We assist prospective franchisees by reviewing the operative documents, assessing pertinent risks and negotiating required alterations if