This article was previously published by LJN's
Franchising and Business Law Alert
Drafting the right franchise agreement for your client starts
with the development of a franchise plan that establishes the
framework of the franchise system. Too often, clients look to
franchise counsel solely to advise them with respect to disclosure
obligations, state and federal compliance requirements, and
preparation of agreements. However, the success of the entire
system starts with the development of a well-thought-out franchise
plan. The client's considerations should include the following,
among others:
1. The characteristics of the model franchisee.
This is one of the most crucial elements of a successful franchise
system. Considerations include what will be the franchisee's
liquid net worth requirements, level of experience in the type of
business being franchised, and its capacity to grow beyond a single
unit. Franchising to unsophisticated or financially
