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What's Negotiable When Buying a Franchise?

When you are buying a franchise, you have more power than you may think in the franchise sales process. The franchisor is in the business of making franchise sales, and in today’s economy, that has become more difficult. Franchisors are working harder to make sales, holding their breath as they bring a prospect to the closing table, and hoping the sale will go through.

But for a host of reasons, most prospective franchisees never realize they have opportunity to negotiate the terms of a franchise agreement. The Franchise Disclosure Document (FDD) is required to be in plain English, but the agreement isn’t. It is usually presented in full legalese, impenetrable and near impossible for the non-lawyer to read, let alone understand. The contract is presented as a uniform – and uniformly accepted - document: “It’s what everyone signs,” the franchisor says.

Sometimes they’re right; but more often than you might expect the terms are negotiable--if that’s what it takes to close a franchise sale.

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