Owning a franchise is a matter of great pride. In fact many people have seen great success by owning a franchise. There are many steps that are usually followed for the same. For instance, it is important that you interact with some franchisees and know various things from them for your better business plans. Secondly, it is mandatory that you create a solid business plan, which is different from the rest of the people. When other things are almost in place, you must definitely pay a visit to the franchise headquarters. This completes the formalities almost.
There is another important thing that needs to be taken care of well and that is the law. You must ensure that you are protected legally in your business and should do everything possible for that. Hiring a franchise attorney is a great idea in this regard and will definitely bring in positive results.
Here are some solid reasons for hiring the services of a franchise lawyer:
Providing Right Advice for choosing the Best Business Entity
It is natural that the franchise business that you are setting up should have a proper business entity. For instance, should the new franchise be a C-Corporation or Subchapter S-Corporation or a LLC (Limited Liability Corporation)? A competent and experienced franchise attorney is sure to provide the right kinds of suggestions for the same.
If you make a mistake in choosing the right business entity for your business, then you might have to face various legal hassles. This is because each business entity has its own liabilities and legal rights and a business owner should know them. Taxation of the business is also dependent on the business entity.
Knowing about things that Really matter for a Franchise Business
If you are aiming to become a franchise owner, then you are needed by law to have the Franchise Disclosure Document, also known as FDD. Before receiving the document, it will not be possible to buy the franchise that you want.
The FDD is a 150-200 page document and covers every little thing that the Federal Trade Commission (FTC) wants the franchise owner to know regarding the franchisor. Therefore it is very important to know the FDD is complete details so that you are aware of the obligations and the restrictions as a franchise owner and do not get punished for not following them.
Numbers of attorneys specialized in franchising are quite less in US when compared with other fields of law. An expert franchise lawyer knows the places in the FDD and in the franchise contract which need maximum attention. Not only this, laws on franchise keep on changing with time or might change only in one state. A competent franchise lawyer should be aware of this and act accordingly.
Helping in Tough Situations in the Franchise Business
Having a franchise business does not necessarily mean to be a profitable one. There might be various kinds of problems in this business. The franchise that you chose might not be a suitable one or the business location was not a right one and so on. Some franchise owners do not read the FDD completely and thoroughly and miss out on important points which might lead to troubles in future. Hiring a franchise attorney at the first place will save from such hassles.
Ignoring the Suggestion of the Franchise Development Director
Majority of franchise development directors will discourage the hiring of franchise attorneys as they opine that there is nothing to negotiate in the franchise agreement. In case they do so, they should be simply ignored. Most of the directors think of their own profit in this and try and stop chances of negotiation with the franchisee. Hiring a franchise attorney will not let anything go the director’s way and legal processes will be followed.
Author of this article is associated with KickStartLaw.com that has the best business Lawyer Lower Mainland BC.