Starting a franchise can be a rewarding, but daunting undertaking. There are many business law regulations to consider. You must also carefully review your financials and create contracts with franchisees that benefit both parties. A franchise is a great strategy for quickly growing your business especially if the business model is easy to duplicate.
A franchise is designed to help a business expand with the involvement of other partners. Franchise agreements are subject to a variety of business law regulations that protect both the franchise owner and the franchisee. It’s a good idea to work with an experienced attorney to design your franchise operation in a manner that protects your interests.
You will need to find franchisees that can help your business grow. They should be willing to make a financial investment in the company. If they are not, they probably won’t be committed to the business. You’ll need to personally invest a lot of money to start a franchise. You will need to hire a business law attorney, an accountant and invest money in training franchisees. There are also costs involved in creating and distributing marketing and advertising materials. You may need to develop technology systems for the business. In addition, you will still need to invest the money needed to sustain your current business.
You will have to construct a document required by business law called a Uniform Franchise Offering Circular (UFOC) before you enter into a formal relationship with a franchisee. This document will contain much of the information that both parties need before signing a formal agreement. A UFOC contains details on your finances. It also details the obligations that you incur as the franchisor. Many business law attorneys help their clients create these documents because they contain so many important details.
No one wants to think about bankruptcy, lawsuits or other serious problems in franchise relationships. Your business law attorney can help you prepare agreements that address worst case scenarios so you have a plan just in case. You can create carefully constructed contracts that will protect your interests in case serious problems develop with the business itself or with a franchisee.