Living up to franchise licensing that is in compliance to state and local franchise laws is not optional.

Franchise licensing is a formal way of saying that to be in a franchise relationship, everybody has to play by the rules.  The rules that are the “big brother” over the franchise world are set both by the federal and state governments. Just as nobody wants to get in hot water with the IRS, to fail to live up to franchise law could mean that your franchise licensing will become a fond but distant memory.  If that doesn’t light a fire under you to live by the rules, nothing will.

The priority to be very fussy about maintaining a clean nose with the franchise licensing big dogs must be just as high for the franchising company as it is for the franchisor.  When you set out to franchise your business, the idea is not to just have one or two franchisors out there.  The big names in franchising like Starbucks or McDonalds have hundreds if not thousands of franchisors. Every one of those franchise owners but live up to the terms of franchise licensing both at the federal and state level.

You cannot run around behind that many franchise owners to know that they will not put your franchise licensing at risk.  The heart of how a franchisee manages the problem lies in those franchise agreements that get so much discussion as you enter into a franchise relationship with a new franchisor.

You can put some teeth into those franchise agreements. You can put as much detail as you need in those franchise documents to feel you have covered your bases to spell out to a new franchise owner exactly what is expected of them to protect their franchise licensing and yours as well.  In fact, it is smart to customize those franchise licenses by state so that you cover any quirks in franchise licensing laws that some states may throw into the mix.

Checking up on the other guy.

As a potential franchise owner, the idea of worrying whether the company offering a franchise to you is in compliance with the laws covering franchise licensing may never have worried you. You should let it worry you. The last thing you need is to sink your life savings into buying a franchise only to find that they are in legal hot water for not living up to the regulations covering their franchise licensing.

You can check up on the other guy before you even consider signing a franchise agreement with that business.  You can do some snooping around to find out how long they have been in the franchising game and if they have run afoul of franchise licensing legalities so far.  If you smell trouble during that background check, run!

In addition, be sure that the franchise agreements and other pertinent binding franchise documents are just as tough on the franchisee as they are on you about keeping their nose clean with the franchise licensing authorities. If the language of those documents is written to protect you in case there is a problem with franchise licensing at the mother ship, you will be glad you took the time to protect yourself going in.

The legal requirement that franchising documents must be understandable to the average person impacts franchisee and franchisor in different ways.

Franchising documents must be understandable to the average person.  That is more than just a cute idea.  It is part of franchise law.  Since franchising documents originate with the franchisee, you take the kick off on making those documents complete and accurate but also so any average person can read them and get what you are saying.

This can be tricky.  Franchising documents are, after all, legal documents that will eventually become signed and binding agreements between you and every small business person who buys a franchise from you. So cannot just lock the doors and not let the lawyers take a crack at making sure the franchising documents are right.

What you can do is to have your franchising documents reviewed by “average people” that you have hanging around your offices to make sure they can be understood by a potential franchisor. Obviously, you have to assume that the concept of the average person means you are writing your franchising documents to be understood by adults with sufficient education to run a business and be successful dealing with the many financial and legal issues that all grown ups deal with.

The idea here is to cut down on the legal mumbo jumbo.  Have your “testers” jump all over any legal terms that show up in those franchising documents.  Let them ask questions about terminology such as, “What does this mean?”  If some legal terminology pops up in your franchising documents that confuse your testers, some rewrites are in order.

A franchise lawyer or no franchise lawyer? That is the question.

For those who are launching out on the adventure of buying a franchise, brace yourselves.  You are going to be seeing a number of franchising documents show up and it is important you read them and understand them. The understanding part is the important thing because what is written in those franchising documents well, in essence, be the story of your life when you own that franchise and you are an active partner with this strange creature called a franchisee.

You can expect those franchising documents to be understandable by you without the aid of a lawyer. If they are not, you should not be afraid to let the franchisee know that you are having trouble because you have the law on your side that the documents should not be a jumble of legal terms.

You may wonder if you should retain the services of a franchise lawyer as well before you sign those franchising documents.  The answer is yes but not necessarily right away. You should be able to read them and grasp the ideas there without the help of a high priced legal team. But since the step of signing those franchise agreements is a legally binding  step, it pays to have your own franchise gurus look over what is there to make sure the documents line up with state and federal franchise law and that there is nothing missing that you need in there to cover your back.

It is just a smart idea to have your own legal eagles on board to watch out for your interests.  Signing those franchising documents is the start of your new life as a small business owner running a very prosperous franchise operation.  Make sure you start it out right by handling those franchising documents with care.

There are a huge number of franchise regulations on the books but most of them are there to protect the franchisor.

Franchise regulations are an important part of what you must go through to buy a franchise and achieve your dream of great wealth as a small business person. It is easy to look at the huge volume of franchise law and think that, once again, the government is sticking their nose in somewhere that they do not belong. In reality, however, most franchise regulations are put in place not to protect the franchisee but to protect you as you work through the process of buying a franchise and getting that dream business that you have always wanted.

As you work interact with the company offering you a franchise, you will see what seems like volcano flow of franchise documents come your way.  Many of those documents are filling up your mailbox because franchise regulations require that a lot of disclosure happens before you fork over your hard earned money to buy a franchise and set up shop.

Disclosure is a seventy five cent word that simply means that the franchisee must inform you about everything that will happen as the franchising process takes place. Disclosure is also part of franchise regulations because they are required that you know about any and all requirements that you will have to live up to as a franchise owner.  You also have a right to know about what you can expect and demand of the franchising company so they hold up their end of the bargain too.

Understanding the distinctions between state and federal franchise regulations is important.

If things were not messy enough, there are different levels of franchise regulations to be aware of. Before you sign any franchise agreements, it pays to know where state level franchise regulations are in place and where the federal government steps in to add their two cents worth.

One reason to be alert about the different levels of franchise regulations is that if you run into a problem down the road and the franchisee is in another state. If that happens, there could be confusion on how responsible that company is to regulations that pertain to the state where you live. So it is smart to be aware of these distinctions and look for how they might impact the franchise agreements and other documents that you are reviewing as you prepare to buy a franchise and get moving on your exciting new business.

You should not hesitate to get some help form a qualified franchise lawyer or franchise consultant to sort the various franchise regulations out for you.  By engaging someone local, they will be well aware of the state franchise laws.  Your franchise gurus can also interact with the franchise legal brains at the franchising company to make sure they lay out the details of who is responsible for what. Then you can feel confident that you are going into this deal with someone watching your back.

 

 

To expand franchise revenues, provide plenty of support to every franchisor you have.

As a franchisee, your fortunes depend on how well you can expand franchise revenues and growth.  The formula of franchising is not rocket science. Making the big bucks by franchising your business means quite simply, you get rich when they get rich. So anything you can do to help your partners succeed in every aspect of franchise operations, the better.

Your franchise owners are just as stirred up to expand franchise earnings as you are. They got into owning a franchise of your company for a ton of reasons.  They fell in love with the idea of the pride of owning their own business, of being their own boss and the adventure of building a franchise small business. But above all, they fell in love with the big bucks that can be had running a very prosperous franchise. If they are going to make those big bucks and make your bank account explode while they do it, they will need your help.

To expand franchise income and business, the franchisors depend on your resources and experience.  One area that is under your domain that can vastly increase revenues at the franchisor level is advertising. You don’t have to put TV ads up with talking babies or cavemen to get the word out about the great stuff to be had at your franchise operations. Just use your advertising resources well and it will expand franchise business.

There is a simple principle that is easy to just toss off in a sales meeting but harder to live up to.  But it is the one principle of dealing with your franchise owners that will do more to expand franchise profitability than anything else.  That principle is communication. Whether you one 5 franchises sold or 500, be aware of how they are doing and keep communication active so you know when problems start to rear their ugly heads.  Then you can swoop in to the rescue and make the profitable again.

Take nothing for granted when bringing along a new franchise owner.

The idea of giving franchise help to your franchise owners is even more important. Never take for granted that a new franchise owner is ready to take the ball and run with it toward great success.  The one thing a new franchisor has in bumper crops is enthusiasm to expand franchise customer base and profits. What a new owner of one of your franchises lacks is the wisdom and street smarts you have to make their franchise a huge success.

Starting with the orientation you do, the initial interviews and right on through to when that new franchisor opens the door of their new business, never take the success of that new franchise owner for granted. That new member of your team may be a successful business person but don’t assume they know their way around the franchising game. But If you mother hen all of your franchisors both when they start out and even after they are major league money makers, you will enjoy watching them expand franchise earnings steadily year after year. You will enjoy the big profits they bring to your company even more.

When that franchise agreement format shows up just prior to launching you new franchise, it pays to give it some priority attention.

The franchise agreement format that you get from the franchising company may look like a bunch of legal mumbo jumbo at first. But don’t just toss this important document on that stack of mail you never read. It is packed with all kinds of important information. Your ability to complete the review of the franchise agreement format is not optional if you really want this franchise.  It is a must.

When the franchisee sends you the franchise agreement format, that means things are about to get serious.  See it as the last big step before launching your exciting new money making franchise big time. But be prepared to give this legal document some serious quality time. The terms and conditions laid out in the franchise agreement franchise are legally binding on you and on the franchisee. So next to the franchise operations manual to come later, this document is solid gold to you for learning the nitty-gritty about how your franchise partnership will work.

The franchise agreement format is such a big deal that even the politicians got their noses into the act.  The FCC is all about making sure both you and the franchisee play ball according to the rules during the short time window after this document shows up in your mailbox. They are downright stubborn that you must be given at least five days to chew over what you see in the franchise agreement format before signatures are put on the bottom line and you get on to the serious business of buying a franchise.

The franchise agreement format is packed with information you will need.

Be sure you read and understand every single line of the franchise agreement format before you sign it and enter into a legally binding contract.  Like a marriage contract or joining the army, you don’t need to jump into anything until you know exactly what you are getting yourself in for.  There is a ton of great franchise information in that agreement that will let you know exactly where you stand.

The bonanza of information that will come flying out of that franchise agreement format includes the limitations of the territory your franchise can cover and the time limitations of the franchise. Unlike getting married, there are expiration dates on a franchise which can be good for you or for the franchise company because it is a natural way to cut and run if you need to. That is also called a built in exit strategy.

The franchise agreement format will be different for every company but you can expect to see exactly what the franchisees will have to live up to when they are your new partners in your new profit making enterprise. You will also understand without any questions what is expected of you long before you say “I do” to that franchise arrangement. Don’t be afraid to get your own legal eagles involved in interpreting the franchise agreement format. You can bet the franchisee has their legal hounds on the job so you have a right for your crew to do the same for you.

There is a lot of good that can be gained from using business franchise templates but they are not all you should depend on for a solid start to your franchise business.

There is a lot to be said for looking into business franchise templates when you set off on your journey to invest in your own franchise small business.  A template, by definition, is a way to jump-start your effort with a format that is more or less standardized.  And since franchising is franchising after all, some aspects of the business franchise template are standardized.  That is where you can save a lot of time and learn a thing or two starting with these tools to get moving on owning your own franchise.

There are a lot of documents that you will be reviewing and signing as you move through the franchising process and many of them are available as templates. So whether it is a franchise agreement template or some other form of business franchise template, you can find help on some outstanding websites that are there to help you understand what you are up against in making this franchise process your own.

The quality of the business franchise templates you use may depend on how specific they are to the franchising deal you are considering.  If the business franchise templates you might use are too general, then they may not be of any real value.  On the other end of the rainbow are business franchise templates that are prepared by franchising gurus like franchise lawyers and they often quite specific to a particular business niche which fits the franchise operation you are taking a look at.

Use well designed business franchise templates and get some expert help as well.

There is no question that starting your big adventure into franchising with business franchise templates is smart. If for no other reason than for the education in what will be required of you when you have a live franchising fish on the line, spending some time with some well designed business franchising templates is time well spent.

Just as you don’t ask a screwdriver to overhaul your engine, though, understand the limitations of any business franchise template forms. Franchising a business can get to be real tricky and every franchise is unique depending on the type of business and the specific host business that is offering the franchise. Buying a franchise of tax preparation company is going to be drastically different than buying a franchise to sell fast food.

It is always smart to haul in the big guns and get some help when you are taking on the big challenges of sinking your teeth into buying a franchise. There is nothing like the expert advice of a quality franchise lawyer or a franchise consultant who take all of the good work done by a business franchise template and mold that into an attack plan to win that big franchise you want.  That is a one two punch that will help you win out and be off and running making lots of money and having lots of fun running your own small business franchise.

The franchise documents you have to deal with are complicated and confusing but the effort you put into conquering them will more than pay off.

One might think that in a perfect world, complicated franchise documents would not be a part of what it takes to own your own franchise small business.  If you just got your first big bundle of complicated franchise documents from the franchising company in preparation for going into business with them, you are not the first one to think you are going to drown in paperwork.  From the franchise agreements to the other documents that you are expected to know like the back of your hand, the whole process can get a little overwhelming.

Before you throw the whole stack of franchise documents in the drawer and give up and go to the movies, think twice. There are good reasons why those franchise documents are so long and detailed. In most cases, it is for your own protection. That is because of a little thing called disclosure.

Franchise disclosure documents are a big part of the purpose of so many franchise documents start filling up your mailbox. The franchising process has been refined over many years and many problems have been flushed out of the brush that can cause good franchise relationships to go bad.  And one of the big reasons things go south for a franchisee is when you do not know up front what will happen when the legal documents are all signed, huge sums of cash exchanged and you are ready to fire up your franchise.  So franchise documents are there to give you a peek into the future so there will be no surprises.

Franchise documents are long for good reasons.

The franchise industry has found it necessary to make franchise documents as long and complex for good reasons. They are not trying to impress you with how much paper they can send your way or snow you with a mountain of legal mumbo jumbo.  When a company sets out to create franchises, the franchise laws they have to cope with are nothing short of phenomenal. So a lot of the franchise document creation that goes on is to jump through the hoops of so many franchise laws that are in existence that gum up the system considerably.

One top of franchise laws coming out of their ears, franchisors have to think about the possibility of lawsuits that can come out of a botched franchise relationship. There is a lot of dough that trades hands as you get moving on buying a franchise and when that much money is involved and there are lawyers anywhere near, there are going to be some lawsuits when things go wrong.

The good thing is that there are some franchise document laws that stipulate that the franchise documents you have to read and sign must be written in language you can understand. Even at that, it pays to get some help from a good franchise lawyer and/or a franchise consultant to make sure there isn’t anything buried in those franchise documents that can come back to haunt you later. But if you take your time and read those franchise documents and make sure you understand every paragraph you find there, you will be prepared in every way when the time comes to launch your franchise and start raking in the big bucks.

If franchising is a good idea, master franchising is even better but understand the pros and cons well before taking it on.

It might sound like the idea of master franchising is franchising on steroids. But in reality, there could be a volcano of opportunities for even more riches if you decide to go the master franchising route. But, like any golden business opportunity, knowing all you can up front is not just a good idea, it is a must. So get all the franchise information you can about this twist on the franchising concept and you will be better off for the effort.

The idea of master franchising does not take a rocket scientist to grasp. In a nutshell, a person who is dabbling in master franchising is able to own a franchise and own and operate sub-franchises in the same vicinity where he or she operates and so run a small empire.  It is a nifty idea because, after all, one would think if you are great at franchising, you could be a huge success in master franchising.

There are a few dragons in the land for those who think master franchising is for them. For one thing, you will need a few more big bags of money to invest in master franchising because you are running several businesses under the same umbrella.

Another risk that often jumps out and broadsides those who get into master franchising is that running several outlets of your franchise is going to become a management hurdle for anyone. You must be ready to deal with employee issues at all of the sub-franchises. You may be called upon to cope with facility problems and handle the book keeping for your vast empire as well. So you should be sure that in addition to your zeal for master franchising, you have some serious stripes in master management and master multitasking as well.

The gold mine of profits that master franchising might return may make the risks entirely worth it.

There is simply no question that there is a lot of opportunity in master franchising for the manager who can deal with franchise operations on a larger scale. Master franchising is not a new concept so there are plenty of people who have cleared the brush for you that can help you figure out how to make master franchising work for you.

For the franchisee who wants to jump start a much larger business very quickly, master franchising a great way to go.  Because you can launch a number of sub-franchises at once, you can get a network of businesses going strong much faster than going the traditional franchise route.  For the small business person who is ready to go whole hog into rapid expansion, master franchising is a great route.

In addition, it is a way to share the bonanza of business skills with those who manage your sub-franchises while they help make your bank account get fatter by the day in exchange for your vast wisdom.  That is not a bad exchange.

One of the first steps to owning your own franchise is the franchise application so it pays to take your time and get it right the first time.

One of the first steps to get behind you in starting a franchise in grand style is the completion of the franchise application. It might feel like you are setting out to slay a dragon for King Arthur when you start the process of franchising a business. The path you are about to trod, however, is well worn and many have killed this dragon before.  So there is no need for theatrics. The key is to know the process and what is expected of you each step of the way.

The franchisor is not being a meddling busy body when they ask you for details about your financial history and how well fixed you are for funds going into this relationship. After all, you would not let them sign any legal document with you if they were dead broke. So they need to know that you have the finances behind you to kick start the franchise process and it is the franchise application where they will start learning what they need to know.

Those questions on the franchise application are going to snoop around in your finances above and beyond the money you will need to get the franchise purchase completed in grand style. They will investigate your credit rating and the finances coming into your home including the finances of your spouse. This makes the franchise application much more of a big deal than a resume for employment. But be prepared to offer that information so they know you have nothing to hide.

The franchise application is the first step of a partnership so be honest.

After they get through the inquisition about your finances, the franchise application may also have questions about your motivations for buying the franchise. The franchisor may also ask other personality questions so they can learn a little about just who it is they are doing business with. There are some personalities that do great in franchising and others that flop big time at franchise operations.  So open your wallet and your soul to the franchisor so they can check you out to make sure you are a fit to be part of their empire.

There is one personality trait you can just make up your mind well in advance will be your shining strength throughout the franchise application process. That personality trait is honesty.  Remember, even more than in an employment situation, the franchisor and franchisee relationship is a very active partnership. Be honest about every answer on the franchise application. Tell the truth from the first line to the last and in particular in the sections of the franchise application that deal with the tricky subject of money.

There is no sense in faking it. If you are financially ready to strike a deal with a franchisor, be proud and confess it openly on the franchise application. If you are not financially prepared for this huge step in your career, better to flush out now than after the franchise process has moved along and there is money on the table.  So bear your soul even as early as the franchise application and from then on out, it is smooth sailing because there are no skeletons in the closet.  You will be glad you did.

Franchise contracts represent a big investment for franchisee and franchisor alike.

You are not being a party pooper if you ask some tough questions before you sign any franchise contracts. Don’t let anyone accuse you of not having the enthusiasm and optimism to make a great franchising operation work just because you are smart enough to read the fine print before you sign your life away. You can have enthusiasm and excitement coming out of your ears and still be a smart business person at the same time.

Let’s not kid ourselves here. Franchising a small business is a big deal. It is a big deal for the franchisee and you can be sure that before they are willing to sign any franchising contracts with you, they checked you out soup to nuts. So you be just as fussy and make sure the franchisor who wants you to own a chunk of their success really will live up to those franchise contracts and is not blowing smoke up your pants.

When a franchisor sets out to “sell” a franchise in their business, it is a big profit making operation for them. The franchisor is setting up a sweet deal for themselves where you do all the hard work day in and day out and they show up once a month and take away the bags of money that come to them from those fat franchise royalty fees.

It is the franchise contracts that make this sweet deal work for them. This is not to say that those same franchise agreements will not pay off big time for you. Franchising is a great way to jump start your small business because in exchange for the investment you make, you open a business that has a built in name recognition and a customer base who want to spend money with your small business.  That can be a guaranteed success if you work hard and know what you are doing.

Franchise contracts are not set in stone.

If you are a little intimidated by those fat franchise contracts that just showed up on your desk, those butterflies in your stomach are your friends. They are telling you not to just turn to the last page and start signing where the franchisee put the big red X marks.  Every paragraph, line and comma of that fat document will have a big impact on your daily life once you are in bed, so to speak, with that franchising company.  Make sure that you agree with every paragraph, line and comma before you so much as take the cap off of your pen to sign up for the deal.

You are not in this alone. Investing in the services of a good franchise lawyer and a franchise consultant is a savvy move on your part.  Be sure that someone takes that franchise contract apart piece by piece and knows exactly what it says.  Then make sure those high priced franchise gurus explain every concept on the pages of that franchise contract to you in language you understand.

You deserve to know what those franchise contracts say and you deserve to have it written in language you understand.  If the franchise contract is written in a bunch of legal mumbo-jumbo, send it back and ask for it to be returned without the dog and pony show.

Nothing is set in stone. If you don’t like something in that franchise contract, change it. Your high priced franchise gurus know how to make those changes.  Don’t let the franchisor push you around. If you negotiate so those franchise contracts lay out just like you want them to, you will walk away with a sweet deal for yourself and a sweet career ahead running a very profitable franchise small business to call your own.

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