Purchasing a franchise can be an extremely efficient way to establish a successful business. Some of the most important benefits of purchasing a franchise is the established brand recognition, financial assistance, and guidance as a new business owner. Although the potential benefits of owning a franchise may seem too good to pass up, it is important that prospective owners invest time, thought, and due diligence into their decision to purchase.
When purchasing a franchise, the agreement may contain fees, standards for minimum profits, royalty obligations, or lengthy time commitments. The agreement may also restrict or expand your ability to renew your franchise, grace periods, liability, or right to find a new owner. Without careful reading, a clear understanding of the terms, and the ability to negotiate your rights as an owner of the franchise, you may end up owning a business that is not a good fit or not profitable.
Knowing this, what should you do before purchasing a franchise? As a potential franchise owner, you should first exercise due diligence by learning everything you can about the company. You may collect information, data, and evidence of profitability from your company contact. Additionally, reaching out to current franchise owners in other regions may give you first hand perspective and insight as to whether purchasing the franchise will be a profitable and satisfying investment.
To ensure that you understand the benefits and obligations you are agreeing to, you also should enlist the help of an attorney who is an expert on the business and legal issues that you may face. An attorney may also be able to assist you in negotiating favorable terms with the franchisor or tackling complicated legal issues as they arise after purchase. The attorneys at Simpson, Jensen, Abels, Fisher & Bouslog, P.C. are experienced in handling franchise issues and are dedicated to your success every step of the way. Contact us at (515) 288-5000 to discuss your potential purchase of a franchise with our firm.
Simpson Jensen Abels Fischer & Bouslog Law P.C. blogs, legal updates, and other content are for educational and informational purposes only. This is not legal advice and it does not create an attorney/client relationship between and Simpson Jensen Abels Fischer & Bouslog Law P.C. and readers. Readers should consult an attorney to understand how this content relates to their personal situation and circumstances. You should not use Simpson Jensen Abels Fischer & Bouslog Law P.C. blogs or content as a substitute for legal advice from a licensed attorney.