What You Need to Franchise Your Business

Franchising is often a fast and convenient way to open your own business. You can build your successful business on the back of a well-known brand, and in many cases, everything you need to operate your business is included in the existing company’s business model. Before taking the plunge and purchasing a franchise, make sure you’ve taken some time to look into the following factors.

History and Experience of the Franchise

Do some research into the history and experience of the business, its officers, its directors, and the corporate entity as a whole. A franchise backed by a strong corporate entity with a long history of success has a good chance of thriving.

Consider Financial Factors

As a franchisee, you get to use the brand’s trademarks, business plan, and other assets, which means a number of upfront and recurring fees. Ensure that you have a complete picture of what you’ll be expected to pay upfront—initial franchise fees, startup costs—and which costs are likely to recur throughout the life of the franchise, including royalty, marketing, and renewal fees. Having this information makes it much easier to determine the potential profitability of a business.

Financial Statements

An informed choice requires full financial disclosure. You should obtain audited financial statements and information about current franchisees. Consulting a business lawyer with these information can help you decide whether or not you have chosen the right franchising opportunity for you.

Your Obligations and Restrictions

To protect the brand and other franchisees, every company has obligations regarding franchisees’ behavior. Your contract may include information on where you can obtain supplies, which software you are required to use, leasing requirements, and how you can or cannot use the company’s intellectual property. Many franchise agreements also include a non-compete clause.

Other Information to Gather

In general, the more information you are able to analyze before making a business decision, the more you’re able to make the best choice for you. Gather information on existing trademarks and patents, any provisions regarding your hiring practices, stipulations pertaining to the sale or disposal of the franchise, and publicly disclosed statements and disclosures.

It’s also recommended that you have a business lawyer look over every document that is given to you or that you are asked to sign. It’s crucial to go into a franchise agreement with eyes wide open, knowing exactly what limitations are placed on you and exactly what you can expect from the company.

Considering buying a franchise and owning your own business? Get the legal support and advice you need at Trembly Law Firm. Call us at 305-431-5678 to get started.

Trembly Law

In the South Florida legal community, Brett sits on the Board of the South Miami Kendall Bar Association, the Florida Bar 11th Circuit Grievance Committee, volunteers on the Florida Bar Young Lawyers Division Mentoring Program, the Dade-County Bar Associations Rainmakers Committee, and annually volunteers for Miami-Dade County’s Ethical Governance Day.
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