When purchasing a franchise resale you will not necessarily receive the same disclosure document from the franchisor as you would normally receive if you were a new franchisee. As you will be purchasing a franchise resale, you will be assuming an existing agreement without modification. The franchisor may not necessarily need to provide you with a pre-sale disclosure as you will be signing a transfer of the seller’s agreement.
If, however, the franchisor is offering you a different agreement to that of the existing franchisee, you should also receive a copy of the franchisor’s disclosure document. Make sure you study this new franchise agreement and disclosure document very carefully as it may contain very different fees and terms from the original agreement signed by the seller of the franchise business and could impact the worth of the business considerably.
Please beware! It is of the outmost importance that your legal documents are examined and explained by an attorney with franchising knowledge as only he or she will be able to provide you with the correct guidance and advice. Although it may be tempting to have your house closing attorney look over this as it may be less expensive initially, the reduced legal fee may prove to be very expensive to you later on. It is critical that your attorney has the working knowledge of the franchise rules to be able to protect you properly.
Buying a franchise resale can be a fantastic business start-up opportunity for you, but you need to make sure that you do your homework first before you part with your hard earned dollars!