LICENSES AND FRANCHISESLicensing agreements and franchise agreement are some of the most common agreements that exist in the business world. Most individuals have done their research before they are ready to sign a franchise or licensing agreement. They will have reviewed their various options and have developed a business plan that is within their budget. The next step is to retain a lawyer to review the agreement you are about to sign. If you want to buy a franchise it is essential you do the following:•Speak to one of our lawyers. Signing a franchise agreement is a big life decision. There are important clauses that can affect the success of your business. Fees and costs are some of the key clauses that need to be carefully reviewed. •In Canada, under the current jurisdiction mechanism, a franchisor is required by law to provide prospective franchisees a Franchise Disclosure Document. An agreement cannot be signed and entered into for at least 14 days after the document has been delivered to the franchisee. Furthermore, in provinces such as Ontario, the deposit for the transaction cannot be provided until after the 14 days have passed.•One of the key issues that you must be aware of is whether the franchisors or its principals are being sued or involved in any litigation. They are also required to disclose whether they are subject to any bankruptcy proceedings for the last six years and if they were under any administrative proceedings. A lawyer from our firm can assist you in conducting the research and reviewing it with you. •The disclosure documents will outline all the current and former franchisees. You are permitted to speak to them and get information to them. There should be no issues and if there are, this would be reason to be cautious about this particular franchise. •US franchises can provide you with a US disclosure document. Be cautious as you read the document as it may not have been modified for a Canadian audience and/or a realistic opportunity in Canada.•Be aware of all start-up costs and how accurate they are. Our lawyers can assist you in these matters. Please contact us for an appointment.
Copyright by Bobila Walker Law LLP
Tell us how we can help. Book your initial consultation. Call 416-847-1859 or you can send us an email.