Before starting a franchise, you also need to make decisions concerning the terms you will establish for your franchise. Some of the considerations that need to be made may include:
How much you will charge for the initial franchise fee;
How much royalty payments will cost;
Which suppliers you will use;
The cost of advertising fees should you decide to charge any to the franchisee;
The obligations that a franchisee will have to you as the franchisor;
The type of support you will give to the franchisee; and
Methods of training to be done for the franchisee.
You also need to prepare a written disclosure document, which is known as a Franchise Disclosure Document (FDD). This is to help make sure that your business is complying with federal franchise laws and any state regulations. To better understand these laws and how to prepare an FDD, you should contact a New York business lawyer who has experience in this area. The Franchise Disclosure Document
You will have a certain amount of time to provide this document to any potential franchisees. It must disclose 23 required items. Some of those 23 required items include:
Summary of the business and any potential competitors;
Any required regulatory compliance for your particular industry;
Background information about you, the franchisor;
Any litigation or bankruptcy history of the company or persons involved;
Information on trademark registration;
Initial investment expected to be made by the franchisee within the first 3 to 6 months of operating the franchise;
Locations of the company and franchised locations and any potential additional openings; and
Franchisor's audited financials.
These are just some of the roles that a franchisor plays in a business. To better understand what can be expected, you should contact a New Jersey business franchise lawyer who can clearly spell out the legal requirements of becoming a franchisor.
If you are an entrepreneur who is interested in purchasing a business or franchise, there is a lot you need to know, including the top 5 business-buying myths and how to evaluate business assets. For a limited time, get this FREE business manual An Entrepreneurs Guide to Purchasing a Business or Franchise. Offering expert help in New York, New Jersey and nationwide, business and franchise attorney Charles N. Internicola is ready to answer your questions about franchise, national and international trademarks, and any critical business matters that may arise. Contact us today - 1-800-976-4904
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