For those who are interested in opening a business involving minimum risk, entering into a franchise agreement may be an option worth considering. However, a franchise includes a process many consider complex due to the legal considerations. It is important to remember that opening a franchise doesn't guarantee that your business will be a success, and there is still some degree of risk involved. When making your decision, it's important to consider the possible pros and cons of starting a franchise in order to determine if it's the right venture for you.
You must do your market research
As with any business, a franchise is susceptible to how the market changes, fluctuates and reacts. Your market research must include knowing where other franchise business owners are located, knowing your area's demographic, having a firm grasp of economic trends and understanding why market fluctuations occur. As your business grows, your market research will continue to evolve and be on-going. So, be prepared to continue these efforts moving forward. Your research should not be a "one and done" undertaking.
You will "live" your business
A significant amount of time is devoted to all start-ups, including franchises. This reality often means time investments, as well as monetary. One of the biggest mistakes business owners make is starting out and expecting to see an immediate profit. Unfortunately, this is unlikely. You're going to invest a lot of effort, time and money before your franchise becomes profitable. Therefore, it's going to seem like you're "living" your business a great deal of the time initially.
Understand the terms of your agreement
Just because you're a franchise owner doesn't mean you are not required to abide by the terms of your agreement. For example, under most circumstances, you must renew your agreement every five to ten years. Once this period is up, then you could be facing new terms and fees or potentially lose the franchise. If these are your circumstances, it may be beneficial for you to seek legal council to help you negotiate the terms of your agreement and protect your best interests.
Seek legal representation
If you have questions about whether or not you should start a franchise, consult with an attorney knowledgeable in franchise law. Contact Bernstein & Feldman, P.A. at 410-216-4006 to discuss your small business. Our attorney's will answer your questions and concerns about starting a franchise, help protect your interests throughout the process and advise you on dispute matters concerning your business.