Caution is the by-word in considering the acquisition of a franchisor, since any such deal gets the buyer a unique distribution system consisting of scores, perhaps hundreds, of franchisees who will prove key to the success of the deal. Anyone that buys a franchising company also “buys” its relationships with its franchisees, a blend of both formal agreements and informal practice. Hence, a buyer’s due diligence must explore these relationships in depth to understand just how the franchisor operates and anticipate trouble before it happens.
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Franchise Law Updates, Mergers & Acquisitions Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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