Opening a franchise location is a great way for you to become a business owner and to work for yourself. Here are a few tips if you are looking to become a franchisee.
Do your homework.
You should fully understand the background of the franchise, what you need to be successful, and ensure there is a good advertising program in place. Franchises provide different levels of support for their franchisees and you should ensure that yours provides you with what you need. Prepare a business plan and begin looking into your financing options early in the process.
Do I need a lawyer?
People may think they don’t need a lawyer when they’re setting up a franchise as these are standard documents. It is very important to hire your own lawyer to review the franchise documents and other related agreements that you will be required to sign. Your lawyer’s involvement may depend on the size of the franchise, how long it’s been in business and the types of agreements and disclosure provided.
Do I have any negotiation power?
You may not think that you can change the terms of the documents but that is not always the case. You may have the opportunity to change certain terms and conditions depending on the nature of the business and your needs. Large franchisors often have well-established documents, so changes may not be an option, but smaller franchisors may be more open to discussing terms of the franchise agreement. Hire a lawyer who is familiar with franchise law and franchise agreements. Part of your lawyer’s job is to know what is standard in these agreements and what terms can be negotiated.
Know what you must do.
The franchise agreement will contain numerous obligations you are required to fill and rules you must follow while operating your franchise location. It is important that you fully understand what is required of you in the franchise.
To contact a member of our Business Law Team regarding setting up a franchise, please call us at 902-469-9500 or 1-866-339-3400.