New Year, New You: Explore Franchising Your Business or Startup in 2016
It’s 2016 and you’re wondering what to do this year to expand your successful small business. You may want to explore opening a second location in a new, up and coming area. You may want to ask around to see if others want to open a location. There are plenty of case studies showing that opening multiple corporate stores is the slow-and-steady way to expand your business.
But there’s another option and its franchising your business. The concept of having someone else take take the responsibility of expanding your brand and processes to another location while you collect a nice upfront fee and a royalty check each month is alluring to many small business owners. There’s a saying though when searching online for a “Franchise Consultant” and it’s caveat emptor or “buyer beware”. Some of the big players in the industry will franchise any business and charge you an arm and a leg (i.e., six figures) for the requisite legal documents and other services to get you to franchisor status. When choosing a company to franchise your business, there are four key points for you to consider:
1. Choose Experience and Leaders in the Franchise Industry
Who are the people that you are paying significant dollars to franchise your business? Do they have a brick and mortar office? What lawyers are preparing your franchise documents? It is essential that you check the background of the company hired to handle your franchising. Our franchise lawyers have seen all too often that a small business will walk away after paying a large conglomerate franchise shop with a boilerplate Franchise Disclosure Document (FDD) and franchise agreement that does not comply with federal and state franchise laws. Our franchise lawyers have reviewed FDD’s and franchise agreements prepared by non-lawyer consultants which simply do not comply with existing federal and state franchise laws and results in unimaginable headaches to you. Our franchise lawyers suggest that you choose leaders and experience in the franchise industry in all areas of franchising including the legal side which, to many folks, is the financial barrier to entry after getting a quote from a large law firm or a big consultancy. This leads into the second point…
2. Don’t Overpay to Franchise Your Business
Franchising your business shouldn’t cost you six figures and your first born. Choose a company that offers a la carte pricing for the legal documents, necessary manuals, branding, website, etc. so that you don’t pay for what you don’t need. Shop around. Remember that a small, experienced franchise firm can prepare the same quality franchise documents as a large firm but charge you half because they may not have the same overhead of a large firm. If you go with a consultancy, make sure you know which lawyers are going to be preparing your documents for you. Our clients tell us that they often don’t get what they pay for going the non-lawyer consultancy route.
3. Choose a Franchising Partner
It is extremely important to ensure that the individuals hired to franchise your business have your best interests in mind and will conduct a thorough analysis of your business to make sure that you will be able to sell your first franchise unit. There are instances where our lawyers have required our startup franchise clients to take a good look at their business and restructure before taking the plunge into franchising.
4. Have a Plan to Sell your First Franchise Unit
Our franchise lawyers recommend that you have a customer or a plan for selling your first unit. Many of the franchise “consultants” will set you up and then leave you flailing in the wind trying to find a suitor for your first franchise unit. Imagine that. You have just paid six-figures plus to call yourself a franchisor yet you have no marketing plan to actually sell a franchise unit. It is ideal to have your first buyer in mind when starting the process but, at a minimum, choose a company that will stick with you during the sales process, assist with finding leads both domestically and internationally, and actually brokering the deals.
In 2016, our franchise lawyers are partnering with Americas Franchising Group to bring you a one-stop-shop and partner for franchising your business called “Franchise Formations”. While our website is being built by the fine folks at Rocket Matter, we encourage you to please contact our office at Wasch Raines to discuss franchising your business as we have launched many franchise brands in the South Florida market and have consulted on franchising brands in a variety of industries across the country. Our franchise lawyers serve as general counsel to franchisors and have represented franchisees in a variety of contexts. Our franchise lawyers charge a reasonable fee to protect franchisee’s interests while going through the process of buying an existing franchise unit or becoming a master franchisee. Our litigation team also represents franchise clients in disputes both in and out of the courtroom.
For a complete list of services offered by our firm, please visit our practice areas page on our website at www.waschraines.com.
About Wasch Raines LLP
Wasch Raines LLP is a business and franchise law firm providing a comprehensive range of services to emerging and established businesses and franchise companies in a variety of industries. Through its unique business model, the firm offers its clients the benefits of having a cost-efficient in-house general counsel and a full service litigation team. For more information, click here to contact us, email [email protected], or call (561) 693-3221. View attorney profiles and read our blog on our website at waschraines.com.
Wasch Raines has has provided this article for general informational purposes only. It is not intended as professional counsel and should not be used as such. You should contact your attorney to obtain advice with respect to any particular issue or problem. Read our full disclaimer at http://www.waschraines.com/terms-of-use/.