The Internicola Law Firm, P.C.

Importance of Capital to Your New York Franchise

If you plan to franchise in New York, the state will require you to meet its franchise capitalization requirements. Because of this, the amount of capital you have is crucial. This means you will have to show that you have enough capital to fund your franchise in New York. You will also have to show you have the capital to provide services and pre-opening support to franchisees.

If you cannot show that you have enough capital to start your franchise and provide services and pre-opening support to franchisees, your New York franchise registration may be denied.

The purpose of franchise capitalization requirements is to prevent undercapitalized franchisors from going into business. To determine your New York franchise capital requirements, the state may assess your minimum capital needs as well as your projected sales estimates.

To estimate your minimum capital needs for your franchise in New York, you can assess your per-unit cost of providing pre-opening and opening services and support to business franchisees, and then multiply that amount by the number of New York franchises that you plan to sell in the next year.

The total will be compared with the capital resources that you report in your financial statements. At the very least, to meet the necessary New York franchise capitalization requirements, your liquid assets must be equal to the amount of capital that you will need.

If you have questions about your New York franchise capitalization requirements, you can get the advice of an experienced New York franchise attorney.

As you plan to franchise in New York, a New York franchise attorney can analyze your capital and determine if you meet the franchise capitalization requirements. 

Contacting a New York Franchise Attorney

If you are an entrepreneur who is interested in franchising your business there is a lot you need to know, including the significance of evaluating your trademark and how to approach the preparation of your Franchise Disclosure Documents. For a limited time, get New York franchise attorney Charles N. Internicola's franchise law report to determine whether your business is right for franchising. Contact us today at 800-976-4904 for more information about Mr. Internicola's franchise law services in New York and how he assists entrepreneurs franchise their business nationwide.