Facts About Franchise Law

Many people dream of being an entrepreneur. By purchasing a franchise, you often can sell goods and services that have instant name recognition and can obtain training and ongoing support to help you succeed. But be cautious. Like any investment, purchasing a franchise is not a guarantee of success.

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What is a Franchise?

A franchise typically enables you, the investor or "franchisee," to operate a business. By paying a franchise fee, which may cost several thousand dollars, you are given a format or system developed by the company ("franchisor"), the right to use the franchisor's name for a limited time, and assistance.

While buying a franchise may reduce your investment risk by enabling you to associate with an established company, it can be costly. You also may be required to relinquish significant control over your business, while taking on contractual obligations with the franchisor.

Selecting a Franchise

Before investing in a particular franchise system, carefully consider how much money you have to invest, your abilities, and your goals. Like any other investment, purchasing a franchise is a risk. When selecting a franchise, carefully consider a number of factors, such as the demand for the products or services, likely competition, the franchisor's background, and the level of support you will receive.

Investing in a franchise is costly. A franchise lawyer can help you understand the company's financial statements and develop a business plan. A franchise lawyer can help you pick a franchise system that is best suited to your goals.

Franchise contracts are usually long and complex. A contract problem that arises after you have signed the contract may be impossible or very expensive to fix. A franchise lawyer will help you to understand your obligations under the contract, so you will not be surprised later. It is best to rely upon your own franchise lawyer, rather than those of the franchisor.

Some common franchise terms include:

• Business Planning
• Financing
• Investing
• Marketing
• Taxes
• Bankruptcy

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