When people are considering opening their own businesses, they may consider purchasing a franchise. As a franchisee, a person can take advantage of an established business or brand name as well as associated products. Much of the work related to developing advertising, logos and creating products and services is already done. Franchisors will also typically provide assistance with setting up a location, including providing training, assistance programs and advice on management and hiring.
While there are a number of benefits to purchasing a franchise, people should be aware that they will have far less control over what goes on than if they started their own organizations. Further, the costs of starting and running a franchise can be high, even if the business isn’t financially successful.
A person who opens a franchise will often be required to pay a number of fees to the franchisor, including ones for using the company’s name. Moreover, an individual may be obligated to provide only particular approved products and services, and he or she may be required to offer products and services that are not popular or profitable. Franchisees may also be obligated to run their businesses in certain ways, including specific methods for handling payroll, accounting and advertising.
Someone who is interested in purchasing a franchise may want to speak to an attorney who has experience in buying and selling businesses. Counsel could help the client to understand the details of a contract as well as what legal regulations may be imposed by the state or the federal government. Legal obligations may include minimum wage requirements, employee training and safety regulations. Specific industries may also be required to follow different laws.