This article published by the Canadian Franchise Association is an absolute must-read for anyone considering the purchase of a franchise. What is not mentioned in this article is the fact that franchise law differs from province to province. In British Columbia, for example, you need an especially higher level of legal advice and protection when dealing with Franchisors because there does not yet exist any form of franchise legislation.
One of Mr. Rebane’s wisest pieces of advice from the article is as follows:
“It’s key to get someone experienced in franchising because they not only tell you what the agreements mean, but what is standard and what is not,” says Rebane. “As someone who has drafted and read hundreds of agreements, I can quickly spot atypical clauses and point them out.” He notes that finding a lawyer with years of experience will also save money. “Someone experienced can get through the documents quickly because they know what they’re looking for without having to research it.”
One of our members gave his account of why this advice is so important:
When I bought my brand-name Vancouver coffee franchise, I was naive and assumed that all I needed was a lawyer who understood business. How wrong was I! Franchising is a completely different beast. I chose a very expensive law firm, and I’m sure that my expensive lawyer was experienced in some form of business – he said he was but I didn’t check any credentials -but it wasn’t Franchising. As a result, I ended up in a really bad deal with clauses that only came to life after I ran the day-to-day business and saw the business practices of the Franchisor. Perhaps my endless headaches could have been avoided…
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