Consult with Us Regarding Your Franchising Plans
Franchising is a system that helps a business to expand in a market without the added risk. A franchisor licenses out their product or business to be run by a franchisee that often pays a fee to use the business name and model. It can be a viable business option, but to successful franchise, it is generally necessary to consult with a NYC lawyer or NYC Franchise law firm who focuses on this area.
- Product Franchises - The franchisor gives a franchise the right to distribute a good and allows them to use the trademark for a fee.
- Manufacturing Franchises - When companies like Coca-Cola and Sealmaster grant an organization the tight to manufacture the product itself.
- Business Format Franchising - When a company sets up a very particular business model and allows other companies to use it.
All the years spent creating an exceptional business brand can come to naught if the franchisor is not legally protected. The same goes for a franchisee. Getting the best deal and making sure all of your legal information is in order is the first step towards running a successful franchise model.
Franchise law does not fit under any specific category on its own. It encompasses employment law, contract law, administrative law, anti-trust law, agency law, tort law, trade secrets law, financial services law, international law, financial services law and debtor/creditor law. With all of these different focuses, it makes sense to get a qualified NYC franchise lawyer before you make the leap into the world of franchising.
Types of Franchising
There are three basic forms of franchising: product franchises, business format franchises and manufacturing franchises. Product franchises focus no governing how a retailer distributes the product. The franchisor gives a franchise the right to distribute a good and allows them to use the trademark for a fee.
Manufacturing franchises are when companies like Coca-Cola and Sealmaster grant an organization the tight to manufacture the product itself. These franchises are allowed to sell the public to the public under the franchisor’s name. Generally, these franchises are food and beverage industries although it can apply to other products.
The last type of franchising is the most popular form. With business format franchising, the company sets up a very particular business model and allows other companies to use it. They allow the new franchise to have access to a significant amount of assistance in managing the company.
To be the ideal candidate for this form of franchising, the business should have some of the following characteristics:
- Unique concept and ease of operation
Businesses do not have to have all of these characteristics, but should possess several of them. Companies like McDonalds and Dunkin’ Donuts have had a track record of success at using the business format model of franchising.
Advantages of Franchising
When a company decides to start a franchise, they give up a lot of the control over their companies. Although they reduce the amount of risk they have during the expansion, the franchisor has to deal with not being able to micromanage the operation of each individual business.
The franchisor gets to spread out the capital costs of expansion and can often expand more rapidly. Individual business ownership is more accessible to the average citizen and the brand can also be rapidly developed across a broad geographic area.
Most businesses choose to franchise because these benefits far outweigh the costs. For a franchisor, there will always be a risk that the brand name could be damaged and the individual units will not be easily controlled. The franchisee also has to face any negative consequences of the franchise agreement.
A new franchise owner will not have the control over their business that a normal business owner would. In addition, they will have to pay back fees to the franchisor regardless of the level of profit.
Why Get a Franchise Lawyer?
Starting a franchise can be a daunting process. Franchisors and franchisees both have to comply with a number of laws governing the regulation of franchising. As you make the decision to purchase or sell a franchise, it is important to understand all of the terms in the documents going into it. A Dominican Republic franchise lawyer can provide specific, targeted information on what each term means in this contract.
As you search out an attorney, make sure that the person has experience working franchises. From the Uniform Franchise Offering Circular to every document that follows, this NYC Franchise Lawyer will be able to understand the specifics of each situation. Having an attorney means that you are far more likely to have a better deal negotiated on your behalf.
They can also advise you on the fairness of the franchise agreement. From assisting you with creating your business entity or negotiating leases, a franchise attorney in NYC is a key supporter in a quest for franchise ownership.
Franchising is an investment. You spend a significant amount of time and money to start a franchise. With all of the resources invested, it is important that you ensure your business is protected legally. Before you make a purchase of a franchise or choose to transform your business into one, consulting with a qualified franchise attorney such as Perdomo Klukosky and Associates is your first step in the right direction.