Why buying into a franchise isn’t as easy as it might look

The October 2012 Legal Eagles (Alberta Venture) ventures into the exciting world of franchising–no, really, you might think franchising and franchise law is boring, but the business and legal tangles franchisors and franchisees get into make for great stories. In the column, Daniel Zalmanowitz, a partner with Witten LLP in Edmonton and Colin Feasby, a partner with Osler Hoskin & Harcourt LLP in Calgary, tell you how to stay on the right side of the law if you want to buy a franchise. Listen to them.

Franchise Ad

Photo (Franchise Ad) by Chandra Marsono

Here’s the most critical word of advice from the story; also  the piece you’re least likely to follow:

[Zalmanowitz would] prefer you not even hire him – and thus waste your money on his fees – until you read through the document and do one important piece of homework. Ready? The disclosure document will include a list of existing franchises, closed franchises, and franchisees that have left the system, as well as their contact information. Zalmanowitz wants you to call a sample of them: a few who have opened recently and are still in the “honeymoon” phase, a couple who have been at it for years and know all the ins-and-outs of the relationship, and a few of the ones who left.

The person who managed to convince me that franchise law is not boring, by the way, is Toronto franchise litigator Jennifer Dolman. She blogs about franchising at the National Post; find her blog here.