West Coast Bankruptcy Law offers a Franchise Disclosure Document (FDD) Review, the franchise agreement. The FDD agreement is what you sign as the contract between you and your franchisor. We offer our FDD review at a flat-fee. But often, we are asked, What goes into an FDD review?
WATCH: Franchise attorney Nate Riordan answers, What Goes Into An FDD Review?
If you have any questions about our FDD review, or about franchising, please contact the experienced franchise and business law attorneys at West Coast Franchise Law today at (206) 724-0846 to discuss your situation.
One of our services at West Coast Franchise Law is something we call an FDD review.
When new franchisees are looking to buy a franchise for the first time, they often hire an attorney to look over the FDD. That’s the franchise disclosure document. And that document which is pretty long contains the franchise agreement. That’s the agreement you’re going to sign. That’s the contract between you and your franchisor. And here we treat this as a true flat fee.
We’d like to give the consumer certainty about the price. And so what we do for a flat fee is we review, we fully read the FDD. When we go through the FDD and it’s got different sections, we like to make sure that we call your attention to anything that might stand out. And that anything that might seem unusual, bankruptcies or litigation, you know, the costs or a lot of times, there’s an item 19 in there that discusses financial data about the different franchise units and compares them year over year. It can be a little confusing. We’ve read a lot of them so we can help you out with that, that item 19. The big issue in there is the franchise agreement. We’re going to go over that. We’re going to tell you what’s there. We’re going to tell you what’s not there. We’ve read hundreds of these things.
So we’ll explain why some of the things that might seem a little awkward or uncomfortable actually need to be there for your own protection. You need a strong franchise system that can enforce the terms of the franchise agreement and a lot of uniformity across the system, and the franchise agreement is the way they do that. So we’ll walk you through it. A lot of folks will tell you that you can’t get changes to your franchise agreement and that’s not exactly accurate.
We often get amendments to franchise agreements and get clarifications or written agreements about the way something’s going to be handled. And we’ve gotten some fees waived. You’re not going to change the big things. You’re not going to change royalties or advertising fees but there are some things that we might be able to work on. The newer the franchise, the younger the franchise, the more negotiable some of these terms might be.
Once we’re done going through the agreement, we’re going to go through it with you. We’re going to make a list and I’m gonna take this list and it’s going to have all the things that we have questions about that we want changes or that we want clarified and we’re going to send it to the franchisor and you know, they’re trying to sell. So they’re going to send it back to us in a couple of days. We’ll go through that list with you, make sure it’s okay. Send it to them. When it comes back, we’re going to review it with you, the prospective franchisee, to make sure it makes sense. And you know, they might send an amendment or some changes back with it, we’ll review that with you and this will continue back and forth until we’re done. It doesn’t go back and forth usually more than once or twice.
But you know, the point is as part of our service, we’re with you until you either finish the agreement and sign it or tell us you’re not going to sign it. And along the way, we’re going to cover other business issues, like how do you relate to the entity that you’re going to use to hold this franchise? If you’re using a rollover benefit, an IRA rollover, they call it a ROBS, to buy this thing. Are there ideas that we have for how you can move money around and how you can get paid? And we’ll talk to you about if there’s anything that you need to see in your lease. And of course, if you need help with your lease, we do that too, it’s not part of the flat fee. But it’s another service we provide.
The FDD review is a true flat fee and that’s all that we do for that flat fee.