How to franchise your business. When you decide to become an entrepreneur, this is just the first of many decisions. A very common question is, would it be better to open a business from scratch or buy a franchise? A franchise helps business owners to deliver well-tested products with a higher possibility of success. While franchises make it easier to succeed in a business, you will also need to pay initial fees and annual licensing.
If you decide to buy a franchise. Here is what you need to know:
You will need a contract agreement. This agreement is the foundation of your franchise; everything will be included in this document, such as renewal rights, cancellation policies, and fees. This contract and any other will be temporary.
When you have a franchise, it is important that you consider all the costs, ongoing fees, and goals you would like to achieve with this new business. There are different levels of support franchisors give before you partner up with a franchise; do your research and make sure that it is a company you want to work with for several years.
Let’s go straight to the pros and cons of buying a franchise. The pros of these kinds of businesses:
- Having the know-how of a successful and proven business
- Recognition from the public
- Previously tried and approved training
- More purchase powers as you are part of a bigger brand
The cons of owning a franchise are:
- You have less flexibility in operating hours, suppliers, esthetics, and the business in general.
- You will need to share your profit with your franchisor
- You will have to deal with the reputation of the business when it is good but also when it is bad.
- Franchisors can decide to close your franchise by not renewing your contract if it is not making enough money.
As you consider opening a new business, consider whether it is a brand new startup or a franchise. Remember to do your due diligence, investigate the market conditions, write a business plan, research locations, get permits or licenses and hire a franchising consultant. It is also important to make sure you are doing things right from the beginning. Working with a business lawyer saves you a lot of trouble, money, and frustrations. If your business operates in California, we can help you. We are an established and growing law firm that specializes in business litigation matters for businesses located in California and the Pacific. Call us now for a Strategy Session. We can talk about how we can help you to run your business without worrying about the underlying legal consequences. We can be reached at (714) 415-2007 or reserve your spot by clicking here.