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.

 

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.

Examine the franchise contract example that you get from the franchisee carefully so you can be certain that you agree with every line of it before buying into that franchise.

In the last weeks before final papers are signed, the franchising company will send a franchise contract example to you as part of disclosure.  To the prospective franchise buyer, these franchise disclosure documents are not optional to how the tricky negotiations to buy that franchise roll out. So when that franchise contract example shows up, pay attention to it because you will find there a laundry list of what the franchising company expects of every small business owner who wants to hang that franchise corporate logo outside their business.

When a company sells franchises to grow fast, there is a huge priority on making absolutely certain that every franchise they sell looks, smells and operates exactly the same as every other franchise. The franchise contract example is their way of sending up that flare to you that if you sink your teeth into running one of their franchise operations, you will pony up whatever it takes to live up to that uniform image of the brand.  By sending you a franchise contract example, they are laying down the rules of the game. You need to know the lay of the land because if you don’t play by their rules, the results spelled out in the franchise contract example can be pretty harsh.

If you have been curious what you are getting yourself into, the arrival of that franchise contract example is there to answer that question.  Give this document some serious and concentrated attention.  When the final version of that same document shows up with the option to sign on the dotted line, it is assumed you know every paragraph in line backwards and forwards because you have studied and agree with everything in that franchise contract example.

The franchise contract example is the prototype of a franchise agreement that is more binding than the marriage contract so take it seriously.

If you do not agree with everything in the franchise contract example, now is the time to bring that up, not after the franchise agreements have been signed.  This is also the time to get your legal eagles on the case to look that franchise contract example over in detail to make sure your interests are well protected and that you are not agreeing so something that is outrageous.  So do not be shy about getting some high powered franchise lawyers in on the game so they can watch your back long before the time to write that check and buy that franchise comes along.

There are a lot of details buried in the franchise contract example that should give you a very clear vision of the future once you own and operate a profitable franchise small business.  That future will include keeping that franchise name squeaky clean and living up to the financial obligations of running that franchise so it lives up to corporate standards. It is true that being a franchise owner is not the same as working for that company but it is the next best thing.  You are expected to keep your facility clean and in good repair. By signing that final franchise agreement, you are saying loudly to the franchise company that you will live up to every tiny detail in the franchise operations manual. So be sure you get a crack at reviewing that document in intense detail as well.

There are a lot of documents involved in buying a franchise so you can become a very successful franchise owner.  But there is plenty of disclosure given about what those documents mean and the franchise contract example is one of those crucial disclosure pieces of literature.  Sure, the fun of running a franchise is in operating an exciting business and finding ways to store all of the big profits you will make.  Look on this review of the franchise contract example as part of paying your dues so you can have that fun once your franchise doors are open.  That will make this tricky process of looking at, tweaking and signing franchise agreements a lot easier to put up with.

 

 

Using a format of a franchise agreement sample is smart because you have so much of the hard work done for you.

A big step in starting your franchise business is preparing the documents which is why the format of a franchise agreement can be such a huge help to you.  The franchise agreement is one of the most important steps that will happen to take the franchisee and franchisor from two parties negotiating to the partner stage in lighting speed.

The franchisee is the party that gets things rolling. That gives you the high ground but it also puts a big pile of responsibility to get it right on your shoulders.  When that potential investor in buying one of your hot franchisees starts to you about taking that plunge, they may or may not have a clue of what is about to happen. Rock solid franchise documents can serve as spring training for your franchisors.

The franchise documents serve to nail down the huge number of details of how the franchise will work. They also serve as an education to everybody in the game how it all is supposed to work. That is where a format of a franchise example becomes are real miracle document to bail everybody out if they need that help.

Using a good sample of the format of a franchise agreement can keep you legal.

The franchise agreement is the legal document to end all legal documents when it comes to the universe of franchising. It is the marriage license of franchising because once you and your franchisor sign it and set it in stone, the franchise relationship is underway. That is why starting with a format of a franchise agreement is smart because you can find a template that will incorporate every subject area required by franchise law so you know you are dotting every i and crossing every t to make this important document picture perfect.

Nothing can put a cloud over the honeymoon period of a new franchise than a dispute over a mistake in the franchise documents.  Using a format of a franchise agreement to start out will cut the possibility of potential mistakes like nobody’s business. A good template helps this crucial document spell out in bold letters the financial relationship as well as who does what and when. The result is that the risks of failure will plummet and the potential of huge success and very happy and prosperous franchise partners goes through the roof as well.  That makes taking the time to review a rock solid format of a franchise agreement one of the most savvy business moves you will make this year.

Conquering the Uniform Franchise Offering Circular Template is just one of many challenges that are waiting for you as you build your successful franchise.

You might think of the Uniform Franchise Offering Circular Template as the huge step forward in your quest to own your own franchise. It is in reality the step where the “rubber hits the road”. There is a lot of hard work that will go into turning your new franchise into the gold mine of profits that you want it to be. Understanding this important document is one of those challenges that may take an investment of hard work. But it will be entirely worth it.  That is because the Uniform Franchise Offering Circular Template represents one of the largest disclosures of crucial information about the business partnership that you are about to enter just before you sign the franchise agreement and set up shop as a small business owner.

Don’t fall to pieces when you see how much information is at your fingertips in the Uniform Franchise Offering Circular Template. But at the same time, do not throw it aside and ignore it because your awareness of what is in this critical franchise document is what will make or break your hopes and dreams to become wealthy franchise owner.

To say that the Uniform Franchise Offering Circular Template is a detailed document about the franchise agreement you are about to review is an understatement.  This document should become your bible as a point of reference about every aspect of how the franchise relationship will work, what is expected of you and what kind if support you can expect of those back at the home office as well.

The Uniform Franchise Offering Circular Template will be your encyclopedia of franchising now and going forward as well.

When the Uniform Franchise Offering Circular Template shows up in your mailbox, instead of running to hide because of how much is there, receive it with excitement. That is because the exchange of this document is a big step forward toward that big day when you sign the franchise. The Uniform Franchise Offering Circular Template will spell out in much greater detail a wide variety of information about the company that is franchising their business and about the legal and financial details for you to review. It will be much more detailed than the franchise agreement that will represent the formal start of setting up your new business.

In total, the Uniform Franchise Offering Circular Template will lay out in far more detail than you could have imaged 23 different categories of franchise information.  It is literally the “soup to nuts” document that should answer every question about the franchise opportunity you want to sink your teeth into.

When you put your autograph on the franchise agreement to launch your exciting new life as a franchise small business owner, the assumption and expectation will be that you have read every paragraph line and punctuation mark of the Uniform Franchise Offering Circular Template. The only document that does such an amazing job of giving you a crash course in franchising will be the franchise operations manual that you will get as you get started actually setting up your new business.

So pay attention to Uniform Franchise Offering Circular Template when it shows up at your door. Take your time reading it, reviewing it and make every section of it your own. If you do that, your chances of making it big in the franchising game will skyrocket.

 

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.

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.

Every franchise document that must be signed is a step toward your success and happiness as a future franchise owner

Each franchise document is just as much of the dream of owning your own franchise as the rewards you seek. The image you might have in your mind about owning a franchise may be a vision of opening the doors to your wildly successful business with customers forcing their way in with money clenched in hand to spend in your store. But the reality is that there are some details to cover along the way. Above all, to get from here to there, you need plenty of franchise information so you know what you are doing when you fork over your hard earned money to buy your own franchise business. Each franchise document that you must review will give you the clues to the puzzle to how to become a big winner in the game of owning your own franchise business.

There are a couple franchise documents that may seem dry and dull but understanding them can make you a happy camper in the franchising world.  You can learn about franchise operations by sitting around a McDonalds and taking notes. But looking at each franchise document is a smarter way to go and a better use of your time to boot.

An important franchise document with a strange name is the Uniform Franchise Offering Circular because it makes it sound like junk mail you get from your grocery store. Instead, the UFOC represents one of the most detailed documents you will get that lays out in plain English not only what you and the franchising company must do to make your partnership fly like an eagle but exactly how much it is all going to cost.  The number crunchers in the accounting department will like that.

The franchise agreement is a franchise document that means the day you open your doors of your own small business is right around the corner.

Next to the UFOC, the franchise document that can most change your life is the franchise agreement. Look at this document like the marriage license in terms of its importance. There is no romance here but when you and the franchisor sign the franchise agreement, your franchise relationship is set in stone and you are ready to make some serious money.

You can expect both the UFOC and the franchise agreement to be delivered to you in the two weeks before the franchise partnership is about to become a reality. Yes, you can believe it that each franchise document is important. It is important because they will change you from a casual observer into a full fledged franchisee.  But they are also legal documents that you and the franchisor will sign that puts the relationship into motion.

So that is why they are like a marriage license without the cake or the “kiss the bride” part.  But you can stage a big celebration and bring your own cake because once you have mastered and signed every franchise document, your new business will be ready to go for the gold.  That is worth a cake and a kiss from somebody to be sure.

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