The simple answer is, “yes.” Just like you can get into a car, start the engine and begin to drive without ever having been instructed. CAN you do it? Yes. But the odds that you will crash the car dramatically increase. Why? Because you haven’t yet learned all of the critical nuances involved in operating a vehicle.

The same holds true for franchising. “Legally,” you can begin to offer franchises once you have prepared an FTC compliant Franchise Disclosure Document and completed any pre-offering compliance requirements at the state level. However, by focusing solely on the legal aspect of the franchise development process, a franchisor greatly increases the risk that their franchise operation will ultimately fail.

Experienced franchise attorneys will admit that a high percentage of franchisors who only engage a franchise attorney to draft the required Disclosure Document ultimately fail at franchising. Franchising a business and building a successful franchise operation involves much more than drafting legal documents. The major components include legal, operations, training, marketing, sales, support, and communications. Each one is connected to the other. Failing to address each of these areas is a recipe for disaster.

This is where the assistance of an experienced franchise consultant pays off. Rather than only focusing on the legal aspect of the franchise structure, a franchise consultant considers the total picture and helps the company determine how best to structure each component of the franchise operation. Ultimately, the consultant assists the company (and the franchise attorney) in developing a more robust franchise offering.  

Consider the process of drafting the Franchise Disclosure Document. When a business owner begins evaluating the idea of franchising their business, they learn that “technically,” drafting a disclosure document and complying with each state’s franchise and business opportunity laws is “all” that is required to begin selling franchises. For many business owners, this simply sounds like “legal work” to them. They figure the attorney will ask questions and they will provide answers.

What they may fail to realize is that when determining the franchise structure and relationship, there are many different business aspects to consider. A franchise consultant will discuss various options and scenarios with the company and work closely with the franchise attorney to identify all of the issues that need to be addressed, The consultant will identify the questions that the business owner did not even know they needed to know. For this reason, most franchise attorneys appreciate the added insight that an experienced franchise consultant provides when developing the Disclosure Documents.

In addition, a franchise consultant will assist the company in developing the other key components of the franchise operation. The consultant will also provide ongoing assistance and support once the company begins offering franchises as various opportunities arise.  For these reasons, businesses that desire to develop a successful franchise operation are wise to engage both an experienced franchise consultant and attorney who work together to develop the ideal franchise system. 

© 2009 Stephen E. Vandegrift, all rights reserved