Scotty Milas' All Things Considered Franchising Podcast w/ Nancy Lanard of Lanard & Associates

Scotty Milas' guest on "All Things Considered Franchising" podcast is Nancy Lanard, President and Founder of Lanard and Associates!

Scotty and Nancy discuss the importance of having an attorney review a contract before signing it, even if the franchise document is not negotiable. Nancy explains that her role is to educate the client on the details of the contract and the obligations therein. Scotty emphasizes that it would be foolish not to have a legal review, just as one would not buy or sell a house without a contract. Nancy agrees and explains that even if the franchise agreement is not negotiable, understanding it is essential to know what you are entering.

Scotty and Nancy discuss the importance of having a legal review of a Franchise Disclosure Document (FDD) before signing. The FDD is typically 350 to 375 pages and can be very overwhelming for someone considering an investment in a franchise. Scotty recommends getting an organization such as Nancy's to review the document and explain the responsibilities of both the franchisor and the franchisee. Nancy suggests that when someone receives the FDD, they should do three things right away:

1: Look at the financial information
2: Read the agreements carefully, and
3: Make sure to ask any questions they have.

They should also have an attorney review the agreement before signing. The FDD is a 10-year agreement and is very important, so it's critical to make sure everything is understood.

In this conversation, Scotty and Nancy discussed when the best time is to review the FDD and franchise agreement. Nancy recommended that prospective franchisees read the first 20 items of disclosure in the FDD. She also suggested that franchisees talk to franchisees listed in the FDD to get an unbiased view of the franchise. Moreover, Nancy noted that it is important to look at the financial health of the franchisor. She said that the best time to contact a franchise attorney is when the prospective franchisee has narrowed down their choice to one or two franchises they are looking to move forward with. Nancy concluded that it is like a marriage and a parent-child relationship when it comes to a franchise agreement, and the franchisor needs to exercise control over the franchisee.

Finally, they discuss the process of becoming a franchisee. Scotty explains that one of the important steps is reviewing the Franchise Disclosure Document (FDD). They go on to explain that FDD will vary depending on the franchise system, as some are emerging brands, and some have been around for a longer time.

Nancy also outlined two key areas to look out for in the FDD:

1. Item 7, which details the cost to open and operate, and
2. Item 19, which is the revenues of franchises. Understanding these two areas is essential for anyone interested in becoming a franchise owner.

Scotty Milas can be reached at scott@scottmilasfranchisecoach.com and at (860)751-9126.
Nancy Lanard can be reached at www.lanardandassociates.com and at (215)392-0030.

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