Establishing a Franchise System
Establishing a franchise system should be approached carefully. It is a complicated business endeavor, and the regulations that govern franchising are usually unfamiliar to anyone who has not franchised a business before. Despite these challenges, franchising is a popular form of business ownership and expansion. It is particularly attractive to new companies in retailing and services because it helps a firm grow quickly and alleviates the challenge of raising money. BEGIN can help you evaluate the pros and cons of establishing a franchise system.
Buying a Franchise
Potential franchisees should strive to be as well informed as possible before purchasing a franchise and should know that it is often legally and financially difficult to exit a franchise relationship. The initial cost of a business format franchise varies depending on the franchise fee and the capital needed to start the business. Purchasing a franchise should be weighed against the alternatives of buying an existing business or launching an entrepreneurial venture from scratch. BEGIN can help you in the decision making process, as well as the actual purchase of a franchise.
Legal Aspects of Franchising
The offer and sale of a franchise is regulated at the federal level. Federal Trade Commission (FTC) Rule 436 requires franchisors to furnish potential franchisees disclosures that provide information about the franchisor, the franchised business, and the franchise relationship. In most cases the disclosures are made through a lengthy document called the Uniform Franchise Offering Circular (UFOC). The franchise agreement is the document that consummates the sale of a franchise. In addition to the FTC disclosure requirements, 17 states, including Florida, have laws providing additional protection to potential franchisees. It is important to hire an attorney to help you with these issues, and BEGIN's attorney is here to help.