Business Formations - Business Dissolutions


Franchise Law Questions and Answers

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Q. We own and operate a small but successful business that we would like to franchise. Our capital is limited and we are concerned about making an open - ended commitment to spend money on attorneys fees to create a successful franchise. Do you have any suggestions?
A. Yes. We can often provide a client with the necessary franchise services for a fixed legal fee so that you can determine your cost of legal services with accuracy. In addition, upon your request, we will consider accepting certain goods and / or services as barter for all or a percentage of the legal services provided.
Q. I am considering the purchase of a franchise and have been reading various Uniform Franchise Offering Circulars (UFOS). Without exception, every one I have read is very complex and one sided in favor of the franchisor. How much would it cost me for a legal review so that I can make an informed decision?
A. For $950, we will review a UFOC and proposed Franchise Agreement and then prepare an opinion letter that will address the most legally significant provisions. Our intent is to enable you to make an informed decision before investing thousands of dollars, thousands of hours of your irreplaceable time, and sign a contract that may bind you for years. We believe in the concept of franchising but want you to avoid making a mistake.
Q. We recently purchased a new franchise and are highly satisfied with it. Can you help us form an association of franchises to enable us to help each other and to bargain collectively with the franchisor in areas where it is appropriate?
A. Yes. We would be pleased to assist you in forming an association of franchisees. There are many benefits including possible cost savings.
Q. We have owned and operated a small publishing business for several years and believe it could be used as the basis for creating a successful franchise. We don't know where to start. What type of budget will we need?
A. Our no - cost initial consultation was designed to help people like you and to provide us with the information needed to help answer your questions.
Q. I am considering starting a franchise with a co-owner. What are some of the advantages of having a co-owner in a franchisee company?
A. While there are also some disadvantages, advantages include the following:
  • Each co-owner can concentrate on specific areas of the business based upon his or her individual knowledge and experience;

  • Each can contribute to the initial capital of the business;

  • Each can contribute future capital for expansion and / or acquisitions;

  • Each can use his or her resources to sell products and services;

  • If you select the right co-owner and use a qualified attorney to document the relationship, your risks will be lower and prospects for success higher.
Q. If I only want to sell two or three franchises, am I still required to go through the same legal process?
A. Yes. However, the legal fees may be as low as $15,000 to establish a franchise and it may be possible to pay for some or all of the legal fees through barter.