How to Buy a Franchise: A Lawyer’s Perspective
This is a summary of an article written by Mr. Michael Liss.
In every industry, there are hundreds of franchise opportunities to choose from which can be confusing to make a decision. Whether you have a number of years spent in owning a franchise and you want to grow more or you are planning to buy a franchise, it is important that you take a look at franchise industry tactics before you begin on any new business plan.
Let’s start with the most important considerations: Before you buy a franchise, be sure you know yourself, the franchise program, and the franchise agreement.
You should always consider what your interests are and what you love to do before deciding on what brand to buy for a franchise. In this way, you will not feel that you are working for your business because you and your family enjoy what you are doing. Remember, you seek for franchise ownership for your financial freedom and also to be the boss of your own while loving everything about your business, even the challenges you will encounter.
Moreover, you should also keep in mind that you should consider your budget. Know how much money you would be needed for buying the franchise, know the amount of money you should have until your business becomes profitable, how much cash do you have and how much can you borrow. Working with an expert Franchise consultant would be of great help for you to work the numbers.
KNOW THE FRANCHISE PROGRAM
Since you do not have to start your business from scratch, you can choose from a wide variety of successful brands for franchising. With this, you have to make research on what brand interests you, what will fit into your budget and what brand program would be negotiable for you. Keep in mind that you should follow the franchisor’s policies so before buying a franchise, seek for franchise consulting for them to guide you in every step of your path to franchise ownership.
Keep in mind that you can always seek help from other franchisees. Call these franchisees and ask them tough and detailed questions. Existing franchisees are typically open on relating to you how they brought their franchise.
They will be the one who can honestly tell you their likes and dislikes about the franchisor and the franchise program. Investigate before you invest. Know your franchisor’s background, additional fees, and costs should all be disclosed and discussed, how you can be assisted in financing, know up to what extent can the franchisor support you and above all learn your legal rights.
KNOW THE FRANCHISE AGREEMENT
Read the franchise agreement, sublease, and other documents provided in the offering circular. You have time to read them because federal law prohibits the franchisor from rushing you to sign the contracts or pay money; in fact, the franchisor must wait at least 14 days so you can get prepared.
– Hire a Franchise Lawyer – Most of the franchise agreements are negotiable. It is at first one-sided since it was written by the franchisor. You have to read and review the agreement very well for you to ask the changes that you want. You can negotiate and change the terms of the franchise contracts to be fairer. A franchise lawyer will know what can be changed and how to negotiate for you successfully.
Michael R. Liss is a business and franchise attorney working to help
businesses start and succeed. He is a frequent instructor at area
colleges on buying a business, franchising, financing, and the legal
issues which business owners must know. He can be reached toll-free