Three Things A Business Lawyer Can Help With When Buying A Franchise
If you have been wanting to start your own business, but are not sure what kind or how to start, a franchise might be the answer. This will give you an already-known brand so you do not have to go through the struggle of establishing a client base. The franchisor will also provide you with the knowledge of the best way to run and operate the business. However, the legal contracts for buying a franchise can be confusing. Before you sign anything, it is best to have a lawyer experienced in business law look over the documents. He or she will make sure you understand everything and that you do not run into legal issues. Here are three issues an attorney can help you with.
Complete Disclosure
As a franchisee, you have the legal right to know what is going on with the company. The franchisor must provide you with complete disclosure to ensure you know what type of company you are buying into. This will include all financial and legal data. You do not want to get involved with a company that is not making a profit, or one that has a lot of legal issues, especially if these issues involve franchisees.
Ongoing Support
Even though your franchise agreement talks about providing ongoing support to the franchisees, you want to be sure you understand what this support will entail and for how long. Your lawyer will know what the standard is for support in the industry and make sure that you will be getting it. In addition, he or she will talk with you about your business acumen so that the support can be increased in the beginning if you need it. Support should include at least training about the business itself, management training, financial planning, and some advertising help.
Area of Operation
When you sign a franchise agreement, it is for a definite area of operation. Depending on the industry and company, you will be given a very small area that is yours alone or a large one. Someone else can buy a franchise of the same company and put it just outside what is considered to be your area of operation. A lawyer will look over the demographics of the business and your area to see if you should have it enlarged or not. You need to have enough people within your area to support your business; having two or more would be too much competition and you would not see the profit you are hoping for.
Keep in mind that when you buy a franchise, you do not have total control of the business; the franchisor will have very specific rules for using its name. Using a business lawyer is the best way to make sure that you and the franchise company agree with the rules and such. This way, you will not have to worry about having the business pulled from you and having to start all over on your own. Contact a company like Souders Law Group to learn more.
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