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Due Diligence in Franchise M & A 1.The Intangible Assets 2.Third Parties at the Table 3.Viability of the Franchise System 4.The Franchise Agreement and Other Contracts
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Due Diligence in Franchise System Aquisitions
Andrae J. MarroccoPartner
[email protected] 416-777-4046
CFA Franchise Law DayJanuary 28, 2016
Edward (Ned) Levitt Partner
Due Diligence
• Goals of Due Diligence• Due Diligence Strategy
Due Diligence in Franchise M & A
1. The Intangible Assets2. Third Parties at the
Table3. Viability of the
Franchise System4. The Franchise
Agreement and Other Contracts
The Intangible Assets
• Trademarks• Proprietary Software• Operations Manuals,
Confidential Information, and Other Intellectual Property
Third Parties at the Table
• The Financial Health of the Franchisee Population
• “Taking the Temperature”
Viability of the Franchise System
• Compliance• Sales Protocols• The “Flip Rate”• Senior Management
Franchise Agreement / Contracts
• The Franchise Agreement• Different Versions • Indemnification• “Side Deals”• Logistical Concerns• Other Contract
