On behalf of Kadish & Associates Law Group posted in Business Formation & Transactions on Tuesday, September 25, 2018.
Some entrepreneurs opt to start their business through a franchise. This type of business is one that can be very successful since you are pulling part of your business through the franchise brand. It is important that you find a franchise that works for your needs and in your area to increase your chance of having a successful business.
Just to be clear—there are risks present with starting a franchise. There is still a chance that it won’t be successful and you will lose your investment. You have to be willing to put in the work that it takes to grow your business or you will doom it.
You should take your time when you are doing the research on possible franchises. Not all companies are going to do well in an area. Looking at the market that will support your company is imperative. Check out the competition and look honestly at how they are faring. For example, you might want to open a fried chicken franchise; however, if there is already one in your city and it isn’t doing well, yours might not fare well either.
Make sure that you check out the relationship between you and the franchise. In exchange for using the franchise’s name, symbol, branding and products, you will have to meet specific standards and uphold responsibilities. These include ensuring that you are providing service that meets or exceeds what the franchise expects and paying for the use of the franchise’s items.
When you use a franchise to start a business, you will sign a franchise agreement. You must ensure that this offers you protections and gives you specific information about what to expect and what is allowable. It might help you to have a second set of eyes check out the agreement just in case you missed something.