Franchise Disclosure Documents (FDD)
Review Costs; How Much Should You Pay?
Author: Kevin B. Murphy, Franchise Attorney, MBA - Mr. Franchise

Cost To Use a Franchise Attorney  

So what does it cost to have a franchise attorney review an FDD? A $1,000 to $3,000 up front retainer (meaning pay this now, plus more later on) applied against hourly rates of $300 to $500 per hour is par for the course these days. That’s not unreasonable, given the magnitude of just the initial franchise investment and the 10 to 20 year legal and financial commitments that will end up being a large multiple of the initial investment amount. But is there is any other competent, franchise attorney review options?    

FDD Evaluator  

Over the past 29 years, I’ve reviewed a lot of FDD’s (formerly called UFOC's). I also owned and operated a franchise myself, so I know how to detect the good, the bad and the ugly in franchising.

Franchise Foundations has developed a unique review program called FDD Evaluator (sm). A flat fee of $600 covers a review of the FDD and gives a thumbs up or down on the franchise. The review also includes disclosing any red flags or unfair contractual provisions discovered. Assuming you decide to move forward at that point, you can either negotiate the unfair provisions yourself – which many clients do successfully – or you can retain someone for that specific task.    

Negotiation of Franchise Contracts  

Contrary to what many franchise companies say, there is a lot of negotiation possible, especially with unfair contract provisions and even more so with new or small-to-medium size franchise companies. Now, if you’re dealing with a McDonalds or other blue chip franchise company, forget about franchise negotiations. But you can also forget about unfair contract provisions – they’re well beyond that. Remember to safeguard your franchise investment by using a competent franchise attorney.  

Copyright 2008-2009, Kevin B. Murphy 

For more information, visit the Franchise Foundations Website:
http://www.franchisefoundations.com/franchiseattorney.html  

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About the Author: Known in the industry as Mr. Franchise, Mr. Murphy is an internationally-known franchise attorney, franchise expert, author, and instructor. For the past twenty-eight years he has specialized exclusively in the franchise industry and owned a very successful franchise in the home improvement field.

He has written over 30 publications, including four books on franchising and one book on trade secrets. Mr. Franchise has drafted, reviewed and negotiated more than 500 franchise offering circulars and instructs franchise company personnel in best franchise practices. He also teaches franchise, licensing and intellectual property courses to attorneys. Mr. Franchise is a franchise attorney and Director of Operations for Franchise Foundations a San Francisco-based professional law corporation.

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