Despite what some in the industry say, it’s neither illegal nor uncommon for franchisors to negotiate franchise agreements with prospective franchise buyers.
This weekend (March 19 and 20) I am speaking at the National Franchise and Business Opportunities Expo at the Convention Center in Denver, Colorado. During my presentation, I will be discussing some of the critical aspects of franchising, and the documents that potential franchisees need to review and understand before signing on the dotted line.
A recent decision by a Court of Appeals in Missouri highlights the importance for franchisors of careful drafting of the arbitration clauses in their franchise agreements. Litigation over issues like this — whether a dispute must be submitted to arbitration or instead whether it can be decided by a court — is a huge drain on the parties’ resources (time and money). A franchisor would be well-advised to think carefully about heavily one-sided arbitration clauses before including them in its agreements.