The recent recession and subsequent slow recovery have steered more entrepreneurs towards franchises.

The boom in franchises means more opportunity, but not all buyers are getting an accurate picture before taking the plunge. Because there is no central regulation over franchising, disclosure statements are often used to confuse buyers into more restrictive terms. For example, franchisers are getting kickbacks for these arrangements. Furthermore, franchisees can only go to arbitration. In some cases the franchise agreements will shorten the statute of limitations meaning the franchisee cannot bring any legal action.

Despite the risks, franchising is a proven business model

Before you enter into a franchise agreement, it must be reviewed by an attorney familiar with the franchise industry. Also, buyers must have thorough due diligence done to determine whether the franchise can be successful. Buying a franchise is one of the largest investments you will ever make, so it shouldn’t be take lightly. If you already own a franchise, or you are thinking of purchasing one, then contact the Spiegel & Utrera, P.A. General Counsel Club at (800) 743-9900.

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