Modern Day Franchising can be an excellent way to extend your brand name rapidly, but there are many draw backs to franchising. One of the most serious considerations is the incredible litigation between franchisees and franchisors. The cost of protecting you Franchise Company from attorneys of disgruntled and/or non-performing franchisees can be very expensive indeed.

It was not long ago before my retirement that I ran a franchise company and even wrote our companies franchise agreements and international franchise agreements; many over 180 to 200 pages of mandatory disclosure documents. One piece of boilerplate clauses I most remember was one we always put at the end of our franchise agreements, which was titled "Questions Concerning This Franchise Agreement" ? and the basic jist of it all was to make sure that the franchisee could not get out of the contract claiming he never read it or did not understand a specific part of it, which indeed could easily happen in 200 pages of legal crap couldn't it? In any case the clause went something like this:

"Franchisee understands the intent of each paragraph of the franchise agreement and Franchisee has asked all questions of anything they did not understand and have consulted competent advisors to help them determine the exact meaning of everything in this Franchise Agreement. Franchisee further considers them selves mentally competent and that nothing written in this Franchise Agreement still seems ambiguous to Franchisee. There is nothing in this Franchise Agreement, which Franchisee did not understand at the time Franchisee signed this Franchise Agreement. Franchisee has shown this Franchise Agreement to consultants and/or advisors who they feel comfortable with and Franchisee's advisors and Franchisor have gone over this Franchise Agreement and related and attached agreements with Franchisee. Franchisee have written down questions and personally checked them off when Franchisee felt they were answered adequately both by Franchisor and Franchisee's advisors." ?

Now on the surface you might think no big deal right? Well without such clauses you could actually be sued and someone who failed to fulfill their side of the agreement could cheat you out of money. It seems with all the over regulation and litigation that it is truly amazing after 200 pages of a legal document you have to have such a clause in the agreement. But with kangaroo courts and juries with their heads up their butts and liberal judges, go figure? This is only one of the reasons I retired early at age 40 from the franchising industry. Consider this in 2006.