Buying A Franchise In New York
There are a series of steps that must be examined and undertaken in order to evaluate a franchise opportunity to make sure that your expectations are the same as the information that is disclosed in the franchiser’s FDD and all the legal rights and obligations that are set out in the agreement, when buying a franchise. It is important to understand that franchise agreements are negotiable and all the steps and modifications thereof should be carefully considered before a franchise agreement is signed. There is also a chance that you may conclude that a particular franchise investment may not be the right one for you.
Buying a franchise is much more than just an ordinary business transaction. It is a step of entrepreneurship that is usually driven by a desire for change in your business goals. Here the businessman wants to gain control of their source of revenue with the intention of building a business that will serve them for many years. It is important to remember the primary goal and to make sure that the franchise you buy will enable you to reach those goals. It is important not to sign a franchise agreement that does not protect your rights or excludes all the necessary protections.
A lawyer needs to understand your expectations for the particular franchise, the reasons behind your goals, and the source of your capital, as well as your reserve capital you have. Finally your profit expectations will need to be examined.
Review of the Agreement When Buying A Franchise
The review process of the FDD and franchise agreement is important for legal as well as business reasons. It is important for each potential franchisee to know what legal obligations they are assuming and the legal rights they are obtaining when buying a franchise. Your cash flow will be affected by the legal implications that are contained in your agreement.
Proposed Assessment When Buying A Franchise
A detailed report should be prepared with regards to the franchisors FDD. This should contain summaries of all substantive legal obligations that you will be assuming and agreeing to. Proposed revisions to the franchise agreement should also be detailed when buying a franchise. This assessment needs to be in simple terms and not legal jargon. It should clearly inform you of what you are agreeing to.
The report should include:
- The impact of royalties and advertising fees on your cash flow and profits
- Total amount of sufficient protected territory and whether competing franchisees sell in your market
- Your rights in terms the future sale of the business, or the transfer to a family member and your rights to internet driven business
- Identifying your protected territory if your business location has not yet been picked
- The time constrains associated with the opening of the franchised business and the consequences of failing to meet that deadline
- Any hidden fees that have not been included in the original assessment of the franchise opportunity.
A Business lawyer NYC will be able to guide you through all of the necessary steps in evaluating a franchise business opportunity and the execution of your franchise agreement. Providing you with a sound business advice that will help you identify an agreement that is not suitable for you.