Check the agreements attached to the franchise disclosure document
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- List every agreement in the file, including any lease, option, purchase agreement, and any affiliate or parent guarantee, and note whether a copy is attached to the disclosure document. Flag a draft whose terms differ from the attached copy and record who asked for the change. Do not draft the disclosure document or any agreement.
- What the lawyer must review
- 16 CFR 436.5(v) (Item 22) requires the franchisor to attach a copy of all proposed agreements regarding the franchise offering, including the franchise agreement and any lease, options, and purchase agreements. Where Item 21 uses an affiliate's financial statements, or a parent commits to perform post-sale obligations or guarantees the franchisor's obligations, 16 CFR 436.5(u)(1) requires the guarantee to be attached. A unilateral material change to the basic franchise agreement or a related agreement attached to the disclosure document must be furnished at least seven calendar days before signing, unless the change comes from negotiations the prospective franchisee initiated (16 CFR 436.2(b)). 16 CFR 436.9(g) separately prohibits presenting, for signing, an agreement whose terms differ materially from the attachment unless the seller informed the prospective franchisee of the differences at least seven days before execution. The lawyer checks each attachment and each changed draft. ABA Model Rules 1.1 and 5.3 and Formal Opinion 512 leave that review with the lawyer.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Potential support includes preparing preliminary structure or wording and identifying points for review. Confirm the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Trace every relied-on figure to its source, confirm dates and assumptions, and independently recalculate totals or derived amounts.
- Review operative clauses in the complete document, including definitions, cross-references, schedules and inconsistencies with the instructions.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.
Related tasks
Draft or review a franchise disclosure document against the prescribed headingsCheck the franchisor's disclosure and any registration the jurisdiction requiresDraft or review a franchise agreement from the disclosure and the term sheetBuild a franchisee due-diligence issues list from the disclosure pack