What should I know before buying a franchise?
Before buying a franchise there are many things to consider. Below is a list of several important things to think about at the outset:
- How long has the franchisor been in business?
- How many franchisees are currently open, operating, and profitable?
- What is my financial and other goals in buying this franchise?
- Am I going to be operating the franchise or overseeing a team to operate?
- Do I have enough capital or access to capital to cover the initial fees and expenses to open the franchise and for, at minimum, one additional year with no revenue being generated?
- What do other franchisees in the system think of it?
- What do the legal documents require me to agree to and do I fully understand them?
There are many other things to consider, but this is a good start.
What do I need to do once I find a franchise I might want to buy?
Purchasing a franchise can be a great way to invest your money, navigate a new industry, and apply new challenges to your life. While buying a franchise can provide a tremendous opportunity, it only works well when the right individual is paired up with the right franchise system.
Once you have identified a business whose concept you are passionate about and you are interested in, you need to review the Franchise Disclosure Documents (FDD). The FDD is an intense document filled with formalities, commitments, and most importantly, your signature saying you agree to all its contents. To say it is intimidating is an understatement. It is for individuals who find themselves in this situation that we have created our Franchise Review Package (link to video or more information). Here, we conduct a formal review of the FDD that deciphers its contents and helps you get comfortable with whether you are going to purchase the franchise.
Should I franchise my business?
How do I know if my business is set up right to franchise?
Franchises are regulated on a federal level and, in certain states, on a state level as well. If your franchise is not structured properly, you may face certain legal consequences that will likely negatively impact your growth and brand. It is important to do a complete review of your business to determine whether you are properly set up and help you avoid pitfalls as you continue to grow your business.
How do I know if my intellectual property is protected before franchising?
One of the most important items needed in order to sustain long-term growth under the franchise model is to have strong trademarks, service marks, copyrights, patents, and other intellectual property protections (i.e. “Marks”). These Marks help you with your brand identity and are an important piece of intellectual property that needs to be protected. It is important to create, apply, register, and manage your Marks so that you can be put in the best position to grow your brand. As part of the initial assessment of whether your business is ready to franchise, we will conduct an IP Audit of your business to help ensure that you have the appropriate Marks applied for prior to franchising.
Do I have the right corporate structure in place to franchise?
Whenever you turn your business into a franchise you need to be thinking about how it is structured from a legal and accounting perspective. Oftentimes, that requires setting up new and different legal entities and business structures to help in limiting your liability and facilitating strategic growth. Each business is unique and is set up based upon criteria that we learn from you through the course of our representation. Taft is able to streamline this process by presenting you with all of the information and available options to help you make a well-informed decision.
What is the difference between a license and a franchise?
What are the key differences between Franchise vs. Corporate Growth?
What is important in order to grow my business through a franchise model?
In order to grow your business through a franchise model, you need thoroughly vetted systems and procedures. One of the most important aspects of franchising your business is having a well-mapped-out Operations Manual specific to your franchise that serves as a go-to guide for your franchisees. Taft works with clients to create, implement, and manage Operations Manuals.
Taft has proprietary software that we use to create comprehensive and compliant Operations Manuals for our clients. We utilize this technology to provide a cost-effective service that streamlines and automates this process.