Keywords: Franchise; Federal Trade Commission; FTC; Offering Circular; Plain Language.

Overlong and rambling Franchise Agreements and Franchise Offering Circulars can and do destroy franchise sales.

Prior to the promulgation of the Federal Trade Commission Rule on Franchising and the various State statutes that govern the sale of franchises, the relationship was governed by contract law. Franchise Agreements rarely exceeded twenty printed pages. The widespread sale of franchises in recent years created a range of problems and losses to uninformed and gullible buyers, who were unaware of the basic facts of the business they intended to go into.

Both Federal and State laws now require a Franchisor, prior to any discussions of a sale, to provide to a prospective purchaser full and complete information regarding the franchisor-franchisee relationship, the details of the contract, the prior business experience of the franchisor, and a wide range of other factors and information relevant to the franchise that is offered for sale.

The torrent of Federal and State cases that have ruled on the sufficiency of these documents and the parties' performance or non-performance under the Franchise Agreements have added to the anxieties of lawyers that draft Franchise Agreements and disclosure documents.

The Franchise Agreements that used to be less than twenty pages in many cases now exceed seventy-five printed pages. The Uniform Franchise Offering Circular looks more like a book, and is almost impossible to understand even by an educated layman, or even by an attorney that does not specialize in franchise law.

Even under the best of circumstances, a percentage of new and existing franchisees fail each year. In many instances the resultant economic loss and heartache is followed by a minute examination of the contractual documents to ascertain if there are grounds upon which to sue the franchisor for rescission or damages. It is therefore imperative that the Franchise Agreement and the Uniform Franchise Offering Circular be written in proper form, complete, fair and that it be understandable by the parties. If there are any doubts or arguments as to the interpretation of these documents, then under contract law these doubts will be resolved in favor of the franchisee.

The lawyer drafting such documents, in his or her zeal to cover all bases, may be unaware of the impediment of lengthy and verbose documents to a franchise sale.

Until the last half of the 16th century, legal writing was in French, and not in English (1 Pollack & Maitland, History of English Law, pp. 84-85). The old French is continued in our present terminology as is evidenced by such words as "tort", "seizen", "venue" and "mortgage". The public's disapproval of "lawyer" writing is understandable and has resulted in the passage of Plain Language Laws.

"Plain language" is not always sufficient to present complex thoughts or multiple facts. What is required is good writing. Stilted legal jargon used again and again may be understandable to another lawyer but, if not easily understood by a person interested in purchasing a franchise, is an obstacle to a franchise sale.

Most lengthy documents can be pruned to eliminate repetitive paragraphs and lawyer jargon can be replaced with precise language which nevertheless makes sense. "In the event that", a favorite lawyer phrase, can be replaced by the word "if". A blue pencil judicially applied can reduce a document by ten or fifteen percent without reducing or obliterating its meaning. It is, however, much more difficult to write a good, short document than a long one. The effort, however, is worth it because it will result in more sales and a relationship in which each of the parties to the franchise agreement will know their rights and obligations.