On several occasions during my research of franchises and business opportunities, representatives and presidents of the respective companies have informed me either implicitly or directly that their UFOC, License Agreement or some other type of partnering agreement were not negotiable. The head of a division of one of the franchises I was considering said to me “though you would want to have an attorney look over the agreement, do not spend a lot of money because our agreement is non-negotiable “. Having had a few years of experience under my belt researching and vetting franchises and businesses opportunities, I always read the agreement first and address provisions that I’m not comfortable with before spending money to have my attorney review the agreement”.
Unsurprisingly, I found roughly 12 provisions in the agreement that I was not willing to accept. Consequently, I documented those provisions in an email and explained why I could not accept them and then informed the company’s representative that I was no longer interested in their company due to the terms in their non-negotiable agreement. Later on that same day, negotiations with that company commenced when the company’s president replied to my email with recommended concessions and an inquiry regarding my availability to meet with him via telephone to further discuss my concerns.
Many of the stipulations in franchise, license and other partnership agreements are negotiable. However, there is some homework you must do to obtain a bit of leverage and to strengthen your position in the negotiation. For example, try to find at least two or three companies that you are interested in and scrutinize them all at the same time. Don’t be shy about informing the companies that you are in discussions with that you are considering other companies and opportunities; especially if you are dealing with a company that is inflexible or not willing to compromise. In addition, understand that franchise presidents and representatives are more likely to consider your concessions if you’ve proved yourself to be a professionally and financially qualified candidate for their business.