Item 11 of the Franchise Disclosure Document is where franchisors are required to outline their obligations to help support franchisees before and after operations begin. Part of this assistance involves loaning the franchisee a copy of the franchisor’s operations manual (“Operations Manual”). The Operations Manual is a detailed document containing information on the standards and […]
Before deciding whether to make financial performance representations, franchisors should consider these things.
At this year’s 42nd Annual Forum on Franchising, Julie Lusthaus co-presented a workshop entitled “Buying and Selling a Franchised Business, Guiding a Franchisee through the Process.” The presentation discussed: “Representing a client buying or selling an existing franchised business is a complicated process, involving myriad legal issues and business considerations. In addition to the traditional […]
Item 7 of the Franchise Disclosure Document (FDD) requires franchisors to set out in a prescribed tabular format a franchisee’s estimated initial investment – i.e., all the expenses required by the franchise agreement and all other costs necessary for a franchisee to commence business. These costs go beyond the fees in Item 5-Initial Franchise Fees […]
There are 4 main types of franchise models for business format franchising: Single Unit, Multi-Unit Development, Conversion, and Master Franchise. We discuss the benefits of each for a prospective franchisor.
The Franchise Disclosure Document (FDD) provides a significant amount of information about the franchisor and franchise system as noted previously. Among the most important items in the FDD are the business terms between the franchisor and franchisee. These are encompassed in Items 5, 6, and 12 of the FDD, which set forth the fees and […]
Once you have decided to expand your business through franchising, one of the next steps is to create the Franchise Disclosure Document (FDD). The FDD contains information about the franchisor and the franchise system. The Federal Trade Commission and state regulators require franchisors to provide this information to potential franchisees to help them make an […]
Once you have decided that you have a “franchise-able” concept, next you must determine whether franchising is the right step for you. Becoming a franchisor requires a substantial investment of time and money, but the rewards can be well worth it. Before you move forward, consider these factors to help you decide if you are […]
You have a successful business and are wondering if franchising makes sense. While there are many well-known and profitable companies, few become franchises. For every McDonald’s, Hertz, Choice Hotel, there are probably millions of businesses that could not and should not franchise. What makes a successful “franchise-able” business concept? The following factors are essential in […]