Successful Negotiation of Franchise Disclosure Document and Franchise Agreement, Saving Client 50% of Purchase Price in Buffalo, New York

We effectively negotiated the terms of an “unmodifiable” set of franchise documents, saving our client fifty percent off the purchase price.  We removed language that was detrimental to our client’s long-term success and modified the personal guaranty so it could be lifted after the satisfactory completion of an earnout period.

Challenge:

Our client was excited to move forward with the purchase of a franchise and wanted us to do a quick review of the legal documents provided by the franchisor before they signed the deal.  The documents were several hundred pages long, consisting of mostly legal jargon, finances, and repetitive language that was confusing and cumbersome.

1. We were tasked with sorting through hundreds of pages of information to deliver a concise, bullet-point list to our client succinctly summarizing key areas of concern.

2. We needed to include suggestions on revised language that would better protect our client and ensure their long-term success.

3. In addition, our client wanted a reduced purchase price.

The process:

• Condensed hundreds of pages of legal jargon into a two-page bullet pointed summary of key information, which was easy for our client to read and understand
• Drafted language to better protect our client’s liability and risk
• Negotiated an exit strategy for our client that allowed them to sell the business
• Removed the personal guaranty after satisfaction of an earnout period

Result:

We managed to help our client save fifty percent of the purchase price for the franchise, saving them several thousand dollars up-front and even more money down the road.  We put in place solid legal terms that protect them and removed the burden of a personal guaranty after an earnout period.  Our client will be able to emerge from this deal without being over-leveraged, and able to act on their plans for rapid expansion.