Clifton, NJ business attorney Peter G. Aziz explains why its important to seek legal advice when starting a franchise. He states that starting a franchise is often a significant financial commitment. Many franchisees don’t realize that most franchisors require a personal guarantee. Even though a franchise is usually opened under a corporation, LLC, or other business entity, the franchisee must personally guarantee the obligations of that entity.

This means that if the franchisee defaults or breaches the agreement, the franchisor could pursue not only the business entity but the franchisee personally. He emphasizes the importance of hiring an attorney to carefully review the franchise disclosure document and to explain the potential consequences of breaching its terms.