Franchising can be a phenomenal way to expand a successful
business idea. By simply attracting individuals who are willing to
invest their time and money in proven business and marketing
techniques, a franchise owner can realize growth rates significantly
higher than if they were to open new location by themselves.
But before you jump head-first into franchising your business, take a
step back and consider a few of the critical areas you should consider
before moving forward.
First, individuals will invest in a franchise because it minimizes the
risk of starting a new business from scratch. And before they write a
check for five or six-figures, they want to be sure that they're
investing in a business that is already proven to be successful.
That means your original business should already have a loyal consumer
following and some degree of brand recognition. If your business has
not been tested in real market conditions, then the business is not yet
ready to be franchised.
You'll find that the bedrock of a successful business that can be
franchised is a trademark for their product or service. Therefore, any
franchise agreement is really a license from the owner of a trademark
(franchisor) giving another individual (the franchisee) the right to
sell the product or service represented by that trademark.
So, a franchise agreement allows a franchisee to operate a business or
sell a product or service utilizing tested methods and the established
a trademark of the franchisor. And that agreement details the fee the
franchisee we'll pay to the franchisor - which usually consists of an
initial fee as well as periodic royalty payments.
For these fees, the franchisee is usually given an exclusive territory
with assurances that he or she will be the only provider of the
franchise's goods or services in a particular geographical area.
As part of this agreement, the franchisor is usually obligated to
assist with advertising, training, management assistance, purchasing
and research and development.
Prior to the first meeting with the potential franchisee, you'll have
them complete an application which will detail their educational
background, employment history, investment capability and any other
information you find necessary.
If you decide to meet with the potential franchisees, the franchisor
must make available to the franchisee a Uniform Franchise Offering
Circle (UFOC). If the UFOC is not available for the first meeting, by
law it must be provided to the franchisee at least 10 days before the
franchisee signs an agreement or hands you a check.
These requirements are set-in-stone and any violation may result in the
franchisor facing civil and criminal penalties down the road.
If you have a successful business and believe it can be franchised,
spend a few minutes early in this process and locate a professional franchise law attorney.
If you find you're having a difficult time finding a content franchise
attorney in your area, then don't hesitate to call us toll-free at
1-866-433-2288 or use the contact form found on this page. We'll be
glad to discuss your franchise idea.
|Patent and Trademark Offices in Florida, Nevada & New York
GOLD & RIZVI, P.A.
The Idea Attorneys®
11575 Heron Bay Blvd. Suite 309
Coral Springs FL, 33076