Franchise legal documents must be completed in compliance with the FTC but they also serve a valuable function for your future franchise owners.

The franchise legal documents that must be properly handled are as much a big part of franchising as the advertising that makes the franchises explode with profits. These documents are under the watchful eye of the Federal Trade Commission.  While it is easy to see this as yet another way that Big Brother is sticking their noses into our business, the discipline of the FTC in making sure franchise law is observed is a good thing.

You would have to live in a cave not to notice that franchising has taken off as a method businesses are using to expand.  That phenomenon has not happened by accident.  The explosion in the number of franchises being opened every year clearly demonstrates that having the big shots in the government sticking their noses into franchise legal documents has only helped the industry.  The stability and protections that the FTC has brought to franchise legal documents has been a force for good and not evil.

The influence of government in making sure there is some level of oversight over franchise legal documents has created an environment where more potential franchisers feel safe in looking into realizing their dreams of owning their own small business as a franchise of a successful chain. That is because the majority of the requirements that the FTC has imposed on franchise legal documents are put there to protect the individual hoping to buy a franchise. Those protections result in more healthy relationships between franchisee and franchisor which leads to more success for everybody.  That is pretty good work considering it is the government that is involved.

Keeping your franchise legal documents useful.

The most challenging franchise legal documents for you to create are the franchise agreement and the franchise disclosure document.  The franchise agreement should undergo plenty of intense scrutiny by everybody in the game because it is the final step that sets the franchise relationship in stone.  When both parties sign the franchise agreement, the franchise partnership is formal and binding. Money must be exchanged and a franchise must spring into existence.  The franchise disclosure document is used earlier during the time when the franchisee and franchisor are sizing each other up.  It is a FTC mandated franchise legal document that has 23 different areas of disclosure that the franchising company must give up to anyone who is thinking about sinking some serious cash into buying a franchise from them.

The government involvement in the franchise legal documents can throw a cloud over them and make us resent their butting in and making it so difficult to get these documents right. You are smart to engage a franchise lawyer to help research and create all of your franchise legal documents so you know that every “I” has been dotted and every “t” crossed when those franchise legal documents go to the prospective franchise candidate.

But it is also smart to step back, take a breath and realize that these documents are exceptionally important to your relationship with those who will represent your company as franchise owners. So government or no government, put some tender loving care into all of the franchise legal documents in the process because when you make them useful to your future franchise owners, everybody wins.

 

 

Be sure you tap into the FDD template when you start to organize your franchise disclosure document because it can help you get it right the first time.

In the world of franchising, the FDD template represents one of the real lifesavers.  FDD stands for franchise disclosure document and it is no picnic to create one when you first start putting together your plan to franchise your business.  It has not been that long since the FDD template replaced the Uniform Franchise Offering Circular. This important document is more than just a friendly greeting to those who are thinking about buying a franchise from you.  It is a heavily regulated and detailed disclosure document that lays out everything from soup to nuts about your business and what the franchise relationship will look like when the dust settles.

Most companies that set out to create franchises of their business see the creation of the franchise disclosure document as one of the real challenges of the quest.  That is because it can be tedious and tricky to get it right. Using a good FDD template can keep you from stalling out while you put together a disclosure document that not only satisfies the government watchdogs but serves to help your future franchise money making partners as well.

When you download the FDD template, be prepared for a project that is going to take up some serious time and energy.  A typical FDD template will detail what goes into the FDD document through 23 different chapters and each chapter will come with charts, illustrations and explanations not only of the kind of information you must disclose to a potential franchise owner in your business but how you must disclose it. Be sure you step through each section of the FDD template with patience and virtually superhuman attention to detail because the FTC is all over this document.

Take the FDD template and run with it.

While much of our discussion about the FDD template might put the fear of god into you about completing the franchise disclosure document, take heart.  It is a step in franchising your company that is necessary and it is one that every successful business that has launched into franchising completed correctly as well. If they can do it, you can do it too.

Instead of viewing the use of the FDD template as a big nuisance, think of the value this document will have for your future franchise owners.  The franchise disclosure document goes to the potential franchisee well in advance of the franchise agreement.  By doing a good job of packing that document with every bit of minutia about your business and about what it will mean to franchise from you, you shift the responsibility for that information from you to the franchise applicant.

Moreover, the FDD template will enable you to do a great job with the franchise disclosure document which will result in better educated franchise owners.  Smarter franchise owners means more productive franchise owners which means partners who are generating large piles of money, much of which comes your way.  So give the FDD template your best effort, not only because you have to do it to stay kosher with franchise law but because you will have a higher quality franchising program as a result.

 

Developing a franchise agreement checklist should be part of your homework before you start accepting applications from people who want to own a franchise.

A solid franchise agreement checklist is one of those great lists that can really save you from a lot of heartache along with legal and financial problems.  Some people are list keepers and others are not.  But a franchise agreement checklist is much more important than that “honey do” list that hangs on the refrigerator at home.  It is a way for you to “check out” applicants for franchising before both parties sign that franchise agreement and you are business partners through thick and thin.

At the top of the list of things to have on your franchise agreement checklist is financial viability. Viability is a 50 cent word for finding out if this franchise applicant has a leg to stand on financially.  Starting a franchise is no place for someone who is in a rebuilding year financially. Those who make it to the finish line and invest in building one of your franchises must have a credit rating to die for and plenty of financial resources.  That doesn’t mean he or has to have hundreds of thousands laying around in the bank. But it does mean that to make the cut on your franchise agreement checklist, there must be an ability to generate income to afford the franchise fees and the start up costs of getting that new franchise on its feet and running like a top.

Moving down your franchise agreement checklist and you should have several pages of questions meant to check out that the applicant for one of your coveted franchises knows the nuts and bolts of how to run a business.  Clearly you do not want someone to buy a franchise who never taken a business from a start up to a booming enterprise. Buying a franchise is for those who are already a success as a way to expand their ways of making even more money.  So check out how well their current business or businesses are holding up as part of your franchiseagreement checklist and the ones that make the cut will be the good ones.

Grading the Franchise applicant’s homework.

It is not entirely accurate to say that franchising a business is not for rookies because everybody has to start somewhere. But it is accurate to put on your franchise agreement checklist that before the ink is dry on that binding and legal franchise agreement, your franchise applicant must know the ropes of franchising.

If the business person who wants a piece of your success is already running a franchise or two, the success of those outlets is a resume in itself. Just as you check out the business savvy of the individual in previous sections of the franchise agreement checklist, check out how well they have done running a franchise before.

If this is the first franchise purchase for a hot prospect, they should be ready to gain an encyclopedia of information about franchising from the various franchise documents such as the franchise disclosure document and the franchise operating manual.  Don’t be shy about checking out the applicant to make sure that their level of knowledge will make them able to hit the ground running when they buy a franchise from your company and turn that franchise into a money making machine. If they can do that, you want them on your team and their score when you finish the franchise agreement checklist will be very high indeed.

 

Buying into a retail franchise agreement can turn into a sweet career so follow the advice of experts to get it right the first time.

If it seems that people who operate from a retail franchise agreement dominate the world of retail sales, there is a good reason for that. The statistics gurus tell us that one of the best ways to get into a successful small business retail outlet and make a go of it is through franchising.  So before you take the plunge and buy into your own retail franchise agreement, research the advice from the old hats at the retail game so that when you fire up your own retail outlet, your odds of success are huge.

There is one simple word of wisdom that anyone getting ready to get out there and work their tails off at a new business should follow and it applies very well if you are about to start working on a retail franchise agreement. That word of wisdom is that when franchising a small business,  be sure you love what you do.  Building a franchise empire from the ground up means hard work and long hours. If you truly love the line of retail you are going into, the hours will fly by and you will wake up excited to go to work.  That is the way it should be.

Once you know that you were born to have a retail franchise agreement of a specific niche, make sure that there are great franchises for sale out there that you would want to invest in and build.  Never seek out a retail franchise agreement from a chain that you are not excited about linking arms with as a partner.  But take that caution to the next level and do your legwork to make sure that there is an urgent demand in your community for that store. Where you open the outlet that is the result of you retail franchise agreement will make all the difference in how fast you start socking away the huge profits you dreamed about before starting your business.

You have the market and you have the location but now what?

If you have found a market niche that you would love to work 20 hours days to conquer and you know there are customers falling all over themselves to buy from you and you have that retail location to die for, a huge part of what it will take to make your franchise a huge success is done. But buckle down because there is still work to be done before your retail franchise agreement translates into big money.

While the company who is ready, eager and willing to sign a franchise agreement with you will provide tons of support, you must build much of your infrastructure with your own sweat equity to make sure your retail franchise agreement is an overnight sensation. Financing is a big deal because it takes some serious money to land a money making retail franchise agreement.  You will also need to sign some leases, arrange for insurance, bonding and tap the minds of a few franchise and tax lawyers to make sure you are ready to run a kosher operation that lives up to that retail franchise agreement well.

But after you have signed all the legal contracts, hired on a crack team of retail go getters and are trained to the eyeballs to make big sales week after week, the time will come when that retail franchise agreement results in a gleaming new retail location that you can call your own.  The sense of pride you will have is a big reward. But the reward you will thrill to the most will be the big bags of money you haul to the bank because of the prosperity that retail franchise agreement has brought to you, your staff and your family.

You have options for the franchise development agreement that you may use to make the most of your franchising plan for the growth of your business.

The most common franchise development agreement that we think about when we begin to entertain the idea of franchising a business is what is referred to by industry insiders as a single unit franchise.  The title pretty much explains itself. The franchise agreement that is developed sets in place a relationship between one franchise owner who buys the rights to open one franchise outlet in the designated territory.  An example is a small business person who decides to purchase one McDonald’s in a very active mall area of town.  That kind of franchise development agreement can be very successful and a great many franchises are run under that kind of set-up.

As you develop how you want to see the franchises you sell in your business be managed, it pays to understand other forms of franchise development agreements.  The single unit franchise will probably stay the privileged citizen of your franchising family because it seems to fit the American dream of success so well.  For a hopeful investor to make that leap from opening their own small business to running a very prosperous single unit franchise in your organization is the stuff movies are made of.

Perhaps not as common but worth plenty of attention is the multi-unit franchising idea.  Once again the gurus who gave this franchise development agreement that name did a terrific job. This franchise development agreement is stunningly similar to a single-unit franchise development agreement with a twist.  A single franchise owner is given the authority to open multiple physical locations under the same franchise agreement terms.

It is probably good to delve into how the franchise is managed under the multi-unit franchise development agreement.  This organization plan does not create a network of managers with tiers reporting to a top dog who runs the show.  Instead one single franchise owner operates and manages multiple physical locations.  It can be a tremendously profitable type of franchise development agreement for the franchise owner and for the franchising company because you are tapping one great manager for all he or she is worth.

Enter the Master Franchisor. 

Both the single-unit and multi-unit franchise development agreement plans are based on one relationship between you and one franchise owner.  It is true that the multi-unit franchise development agreement is a bit more complex but it is worth it for the big piles of money it can generate if it is run well.

A third type of franchise development agreement that taps the power of one great manager with even more complexity is the concept of the master franchisor.  The title has a bit of the superhero feel to it and in a way, because of the kind of money a great master franchisor can make when you are franchising your company with this plan, he or she might be the superhero of the franchising world.

The master franchisor does operate a multi-tiered operation in which you, the franchising company grant to the franchise owner the right to open sub-franchises which are accountable to the master franchisor.  This is not one franchise owner with multiple physical locations.  It is a franchise development agreement that utilizes a structured tier of many franchise owners who are developed and managed by one master franchise owner.  In a way it is like you are allowing one franchise owner to become a subsidiary of your business all his own.

All three of these franchise development agreements have tremendous expansion potential and they can generate huge pots of cash.  Each is successively more complex and the nature of the franchise agreement documents will reflect that.  So keep on staff some crack franchise lawyers if you decide to utilize a mixture of these different franchise development agreement types.  You will keep those lawyers busy creating franchise agreements hand over fist to keep up with the explosion in your growth if you manage it right.  That will make it all worth the effort.

By use of a franchise document template, you can get moving creating the documents you need to launch into franchising quickly.

There is no reason to turn your nose up on using a franchise document template to get moving on your plan to franchise your company.  It is true that you can find a healthy assortment of franchise document templates that can be of tremendous help if you are just starting out in franchising.  It is also true that tapping into these templates can save you a ton of money over having a franchise lawyer hold your hand every step of the way.  But those truths do not diminish that the use of a franchise document template is a perfectly valid method for getting oriented to the different documents needed when your franchising program kicks into high gear.

One way to take advantage of what a franchise document template has to offer is to use it as a learning tool. When you get the itch to take your very successful enterprise and franchise it to cause your expansion plans to explode, your curiosity will take over in a big way.  If you start nosing around other businesses that have used the franchise approach to big profits, the first thing you will learn is that documents like the franchise agreement and franchise disclosure documents are going to be absolutely essential to your success.  You will also learn that these documents don’t grow on trees.  You are going to have to create them for yourself so they fit your business and how you want to see your company make the move into franchising.

You can scratch that itch about what these franchise forms are all about by taking a look at a franchise document template or two.  Just a short time looking at these templates will give you a direction to go on in your planning for how you will win big in franchising. The key to going from zero to sixty in starting your franchising empire is knowing what kinds of questions to ask.  A franchise document template will build your check list of questions to ask in a hurry.

Going from a franchise document template to your customized franchise agreements.

You do not have to worry that simply tapping the value of a franchise document template means you will somehow leave something out.  Look on that franchise document template as a starting place, not the end product of your hard work.  Those templates will jump start you in making decisions about how your franchising program will run. They will inspire you to think about what you will expect of your franchise owners and how you will turn them into business dynamos through your support and training programs.

Perhaps one of the most important documents that will evolve from a franchise document template is the franchise disclosure document.  That is because this is publication will be one of the first documents to go to a prospective franchise buyer and it will serve as a document version of boot camp to orient the new franchise owner about your company and about how they will behave and succeed running a franchise of your company.  The franchise document template lays out an example of how to create your FDD as well as how that document will lead naturally into the development of the franchise agreement and eventually your franchise operating manual.

Each of these documents must be customized and tweaked to fit the peculiar personality and business orientation of your company.  That evolution will happen naturally as you begin to bring in franchise gurus and get your best minds working on exactly how the franchising adventure will work best for your organization.

The franchise document template does not replace that evolution process and it does not replace the value of a good franchise consultant or franchise lawyer.  So when you use a franchise document template in its proper place in the process, it can be a tool to supercharge your program and move you along at lighting speed toward great wealth and success franchising your growing empire.

 

The decision to franchise your company always starts with a question about what to do first so developing that project plan is a perfect way to get the process moving quickly.

If you have kicked around ideas about how to franchise your company, that means you have seen success in your current corporate structure and you are ready for some rapid expansion. The concept of franchising a business is an exciting one because once you have that franchising structure in place, you can see your business begin to grow by leaps and bounds as you bring on more franchise owners who will open new outlets of your business all over the place.

One of the big steps that will accelerate you toward making that transition to franchise your company is the simple act of laying out a plan of action.  This is not a shocker because anything good you do in your business starts with a well crafted project plan.

Two big parts of that plan are how you will protect your brand and trade secrets and revising your business plan to take into account your new plan to franchise the company. When your start selling franchises, your corporate brand, image and logo as well as the trade secrets of your products will go into the hands of franchise owners.  So take the time before you launch your program to franchise your company to protect anything that is proprietary or might be considered “intellectual property” so it doesn’t get away from you.

Once you feel that you have covered the value of your secret stuff, think about how you will go about rolling out your franchises in a step by step way. Just as you had a business plan for how you grew from an idea to the successful business force you are today, make a plan for how you will from one franchise to thousands.  Here is where buying a cup of coffee or a beer for a successful business associate who is an old hat at franchising could be the best investment you will make.  That plan for how you will franchise the company will grow and evolve of course as reality teaches you a lesson or two but at least have a jumping off place to get the show on the road.

Documents and tests

With those two steps nicely done, you should take a few days or weeks to draft some of the critical documents that will become the backbone of your quest to franchise your company.  A good place to start to have a firm foundation to franchise your company will be your franchise operating manual which will become the bible for your franchise holders on every detail of how to make their new businesses work.  That operations manual should grow naturally out of your business plan that you just put on ice. From there move on to the franchise agreement and any other documents you wish to provide to your future franchise owners to help them along their path to greatness in your company.

Once you have what looks like a pretty terrific plan to franchise your company, you can set up a test franchise in a corporate owned branch to step through the process.  Select some courageous manager to be your guinea pig franchise owner but make sure he or she will be empowered and have the backbone to tell you what is great about your plan to franchise the company and what doesn’t work at all.

With all of that preparation under your belt, your hopes and dreams to franchise your company are close to becoming reality.  Put together a knock-your-socks-off marketing plan and a few killer presentations that will have future franchise owners eating out of the palm of your hand and you will have your program ready for opening night. Just stay loose and flexible and ready to make changes as you roll out your plan to franchise your company.  Reality has a way of reshaping great plans like yours.  But if you know how to roll with the punches, reality will only make your program to franchise your company even better.

Using franchise agreement services during the critical time when you are negotiating terms of the franchise relationship is just good business.

You should not think that you are calling in a “ringer” when you engage franchise agreement services so help you sort out the tricky documents that you must understand before launching your franchise empire. Franchising a business is grown-up work. There is serious money involved. The documents that start out as your way of learning the ropes of the franchising game quickly turn into legally binding contracts with some serious commitments of time, resources, work and money.

By engaging good franchise agreement services, you will have an experienced guide in the great safari into the wilderness of franchising.  This is not to say that getting a franchise to start your own business is dangerous or uncharted territory because many have walked these pathways before and come out big winners. But, like a jungle expedition, you will do much better on your hunt to land the big game of a lucrative franchise business if you go into the adventure with an experienced guide by your side.

Part of the work to be done by franchise agreement services is knowing the timing of the various documents that will come your way and how to make those documents your own in preparation for greater challenges to come.  Before you can even think about taking that final franchise agreement out of the envelope, you will have some time to review another document called the franchise disclosure document.

The key word that tips you off about what that document is for is “disclosure”. This is an important piece of literature that the company offering that franchise for sale will send to you to set the stage for striking a deal.  It is in your benefit to read and then read again the franchise disclosure document and make sure you understand every line of it. Your franchise agreement services can be of help if there are parts of the FDD that baffle you.

Franchise law dictates that the franchising company reveal to you all of their secrets in the FDD so it will be packed with all kinds of juicy tidbits of crucial information about how your franchise relationship will work and how the franchising company ticks inside and out. So bond with the FDD like nobody’s business because if you do, you will be prepared when you show up at the door of your franchise agreement services offices with your franchise agreement in your hand ready to make the leap into owning your own franchise.

The franchise agreement is the story of your life for many years to come.

The real value that franchise agreement services will deliver comes when that actual document arrives. A good franchise consultant or franchise lawyer will make sure you get a franchise agreement sample well in advance so they have plenty of time to help you work through it to be certain your interests are represented well in that document.

The franchise agreement is the real guts of the relationship because it is the singular document that binds you and the company selling the franchise together as partners. More than one smart consultant from franchise agreement services has observed that the franchise agreement is more binding than a marriage license. That is something to think about to be sure.

Within the franchise agreement, you will agree to the terms of how the franchise will work, what your operating territory will be, who will be responsible for advertising and how much you can get away with in your own promotions.  Most importantly, every aspect of the money issues that make a franchise a grown-up document are spelled out in the franchise document.  When you put your autograph on that dotted line, you are saying that you are 100% on board with that document.  Your franchise agreement services gurus can make sure that you really do mean that.

While signing that franchise licensing agreement is one of the last steps before you are in business, don’t get in such a hurry that you don‘t look before you leap.

A document called the franchise licensing agreement will show up in the mail as one of the last steps before you write the checks to buy a lucrative franchise and launch out on your new life as a small business owner.  It is an exciting step but as you tear open the envelope to look at that franchise licensing agreement, don’t just flip to the back page and sign it.  Take some time to make sure you understand what you are signing and even negotiate about the nature of the relationship you are getting into.

If the franchise licensing agreement intimidates you a little bit, that’s good. It is a legally binding document that is crafted to comply with state and federal franchise law.  You will see plenty of statements of financial responsibility buried in there. To be fair, the franchise licensing agreement commits the company selling the franchise to legally binding commitments to you as well but they have a small army of franchise lawyers that put that thing together. They are not as nervous as you because if you are working with one of the big dogs in the franchising industry like Subway or Starbucks, they have gone through this hundreds of time before.

Don’t let the franchise licensing agreement push you around. Also do not cave to the idea that you are just a little guy and you have no say in what happens.  Even if the company selling the franchise is huge, they still see you as a customer and a potential business partner that will make them even more wealthy. They may be ready to play ball if you want to make some changes in the franchise licensing agreement.

Know where you stand and what to do if there is no wiggle room.

Just as the company selling the franchise has their surly team of lawyers, you have a right to engage your own legal eagles to make sure that any franchise agreement that you look at is a good deal for you.  It is true that when you get a franchise licensing agreement, there may be a time limitation on when it must be signed and returned to keep the franchise processing active. However, you have every right to expect and/or request a sample of the franchise licensing agreement early in the process of discussions about the franchising process.

That franchise licensing agreement sample should be a mirror copy of the one you will be signing to seal the deal and make you a franchise owner. So get that example to your high priced franchise lawyers so they have plenty of time to go over it and engage in the chess game of negotiating changes before the drop dead date comes when the franchise marriage must happen.

It is possible that some companies offering franchise will not negotiate anything that is in the franchise licensing agreement. They may be big and wealthy and feel they can’t be pushed around.  That all may be peachy if there is nothing in that franchise licensing agreement that is a problem.

But if you need some changes and the franchising company simply refuses to hash out the differences, it might be time to look for a different company to buy a franchise from.  They are not the only fish in the sea and you can find a company to buy a franchise from who wants your business and will work with you to work out a franchise licensing agreement that both parties can live happily with and get very wealthy with for many years to come. Those kinds of franchise licensing agreements and those kinds of franchising partners are worth waiting for.

Writing your own franchise agreement document can be intimidating so don’t be afraid to get some help from the experts.

Creating a solid franchise agreement document is one of the big steps any business has to get past to launch a major franchising effort.  It is not hard to get excited about how franchising your company can put your expansion plans into high gear. But it can be intimidating if not downright scary to think about how to draft a workable franchise agreement document because the franchise agreement is a legally binding contract between you and those who invest in your franchises.

You do not want to make a mess of this document. At the same time, do not fall into the trap of stalling out in the process of creating a franchise agreement document.  The drafting of the significant franchising documents should be done early on in your plans to start selling franchises of your business because without them in place, you really cannot move forward.  So make a plan and carry it out with courage. It may not be a difficult as it seems.

Creating a great franchise agreement document is best done as a three step process.

There is an old saying that goes, “Don’t try to eat the whole elephant.” It is a goofy image but the meaning of the saying is to take on a big challenge by breaking it down into little challenges. So we can apply the elephant eating idea to writing a franchise agreement document.  The best approach is to separate the process into three steps.

Step one is to find some reliable franchise agreement templates to study.  These templates will lay out exactly what kind of information you need to cover in the typical franchise agreement document. You can even take this step to the next level and hunt up franchise agreement examples from similar companies as you so you can see what industry specific types of topics that must be covered.  After all, a franchise agreement document for a hardware store chain is going to differ significantly from a franchise agreement document for a fast food chain. So try to narrow in on what you need.

Step two is to “brain storm” your own franchise agreement document.  Now that you schooled yourself in the basics of what goes into a franchise agreement document, tap into that industry expert that lives inside of you.  Create a draft of the franchise agreement document that reflects in words your vision of how your vast network of franchises will work.  The key to what makes this step work is to not worry a bit about if that draft is legal or correct.  Just get your ideas out of your brain and then organize them into a rough format of a franchise agreement document that you learned from step one.

Step three is to get some help.  If you ever wondered if you will need a franchise lawyer or other experts in this peculiar business step, the answer is yes! So spring for a good franchise lawyer and don’t just take the first name in the yellow pages. Your franchise agreement document gurus can fine tune your brain storming from step two into a great franchise agreement document that lives up to every detail of franchise law and that covers your back nicely.

Be sure that franchise lawyer has a resume of success in setting up franchise operations and that he or she knows your industry niche well. By doing that, if you are franchising a fast food chain, you won’t end up with a franchise agreement document for a hardware store.

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