Owning a franchise can be an incredibly rewarding business opportunity under the right circumstances, but in exchange you give up a certain level of control over the business that you would otherwise have if you started something yourself.
The premise of a franchise is to take an established business model that works and replicate it in additional locations. This means that things like the name, look and feel of the store/location, the product or service offerings, prices, and work flow are already established. The company has already put in the legwork to create the brand and business model and as a franchisee you are buying the right to use the name and operate a location of the business.
The franchisor and the franchisee will enter into a franchise agreement. This will include all of the material terms that govern the relationship. It generally requires the franchisee to comply with all of the terms and conditions of the franchisor and puts the franchisor in the position to make all major decisions regarding business operations.
Consider for instance that you decide to buy a restaurant franchise. In almost every scenario, you will be required to buy ingredients from the franchisor’s approved supplied. You will have to cook their set menu. You will not be able to deviate from their model without express permission. While this may seem strict, the goal for the franchisor is to provide a consistent experience throughout all of their locations nationwide.
If you are looking for a turnkey business that requires less reinventing of the wheel and more capital and manpower, a well-selected franchise can be a lucrative endeavor. However, if your dream is to start and grow something that is truly your own, you may find the limits of a franchise to be frustrating.
If you are contemplating a particular franchise, it is always a good idea to consult an attorney so you understand what your rights and obligations are in the relationship.can offer you a free 20 minute consultation with an experienced business attorney to discuss how they can help you navigate the franchise world and help you identify early on any obstacles or red flags that you should consider. Our network of vetted attorneys also operates on an affordable, flat-fee basis to ensure that you get high quality legal services at predictable costs.