Is Franchising Right for You? Franchise Lawyers Can Help You Decide

Did you know there are nearly three quarters of a million franchise-related businesses in the United States? Franchises are appealing because they allow franchise owners to build a business on an established brand. However, running a franchise comes with many restrictions you might not face if you owned an independent business. You will pay fees to the franchisor in order to use their trademark and business model, and both parties sign a contract defining rights and obligations.

Protecting the Franchisor's Reputation

Because your franchise business stands on the reputation of the franchisor, you will have to follow certain contractual obligations to protect that reputation. You will probably have to make your store look very similar, if not identical, to others in the franchise, and you will almost certainly not be allowed to sell products other than the franchisor's products. Employees will have to follow certain rules, and you will have to get approval for advertisements.

Training and Who Pays for It

You and your employees will have to undergo training on business operations. Most franchisors provide this for free as part of your agreement. You may train at other franchise stores, or you may go to a specific training location. Make sure the franchisee attorneys helping you clarify who is paying for training before you sign the franchise agreement.

Franchises and Fees

Generally, franchisees pay periodic royalties, which are calculated as a percentage of your sales, or as a percentage of your profits. You will also pay a one-time up front fee to start your franchise. Your franchisee lawyer should help you determine if you also have to buy certain supplies from the franchisor. Anti-monopoly laws do restrict franchisors' ability to force you to buy their products, however.

Franchisee Attorneys Should Be Helping You from the Beginning

Franchise lawyers should be on board with you as soon as you decide you want to buy a franchise. From helping you understand franchise disclosure documents to dealing with problems like contract termination, these legal professionals can prevent expensive mistakes and help you get your franchise off to the best possible start.