Typical Legal Fees for Starting a Franchise

There are startup legal costs when developing a franchise.

The legal fees for starting a franchise vary, depending on the type of business. A tremendous amount of paperwork has to be filed, and having an attorney is necessary, preferably one who is experienced in handling franchises.

Function

The initial legal fees cover basic document preparation. You need to have a Uniform Franchise Offering Circular (UFOC), and Franchise Agreement (FA). While there can be a great deal of fluctuation, the initial legal costs can be as low as $25,000 and by the time everything is completed, $50,000.

Identification

The attorney working with the franchisee needs to file a registered trademark, or have a trademark that is under application. The filing costs for trademark filing are not usually covered by the initial franchising filings. The trademark is usually the logo that identifies the franchise to the public.

Retainers

Keeping a lawyer on retainer is cost-effective and timesaving. It ensures that there will be an attorney on hand when needed. Any costs above the retainer fee are paid for by the client. Even though individual franchisees can be sued, so can the owner of the franchise.

References

• AllBusiness: Ten Key Provisions of Franchise Agreements
• Operation Franchise: Six Restaurant Insurance Coverages You've Overlooked
• Lawyer Retainer Fees: Lawyer Retainer Fees
• Franchise Gator: Thinking About Franchising
• The 'Lectric Law Library: The Actual Facts About the McDonald's Coffee Case
• Franchise Bison: The Cost of Franchising a Business