What do you need to know before you invest in a franchise?  I always tell my prospective franchisee clients that they should find out as much as possible about the franchise and the business.  The following are some suggestions on questions to ask the franchisor and things to learn about the franchise before you invest in a franchise opportunity: Read more »

What do you need to know to create a franchise of your business from a legal perspective? You have a successful business concept.  You may have even had inquiries regarding buying a franchise of the business concept.  To franchise your business you will need a federally registered trademark, compliance with the FTCs requirement of a disclosure document (FDD) and legal compliance with certain state requirements. This post will discuss the legal aspects of franchising your business.

First, you must have a federally registered (or at least applied for) trademark with the US Patent and Trademark Office. Registration of your name and logo will protect the name and logo from others attempting to copy your name and/or logo. However, you should know that anyone using the name or logo prior to your use, has priority rights to that name and/or logo for their marketing area. The trademark and other intellectual property (trade dress, etc.) is the cornerstone of what someone will be licensing from you when they buy a franchise from you. Read more »

There are many concerns of a weight loss franchise that need to be addressed by the prospective franchisee. Many individuals contact me looking to invest in a weight loss franchise believing that the product works, so the franchise should be successful. Unfortunately, just because a weight loss product works for you does not mean it will be a good franchise investment for you. Read more »

In today’s economy, landlords and lenders are looking very cautiously at the types of businesses and individuals acquiring a business opportunity prior to lending money or accepting a tenant.  The experience of failure among businesses in the last several years has made both lenders and landlords quite nervous.  However, both lenders and landlords are favoring franchisees over independent business owners.  Franchisees are seen as less risky for a number of reasons.  Landlords perceive that brand recognition of franchisees will bring in more traffic to both the particular store, as well as the entire shopping center. Lenders determine that brand recognition will likely bring in more business and make the franchisee stronger than an independent business owner. The support and training that a franchisee receives from the franchisor, as well as the brand recognition makes both lending and leasing to franchisees seem less risky then independent business owners. Read more »

Most commercial retail leases are triple net leases. What this means is that the landlord passes through all expenses to the tenants on a pro-rata basis. These expenses typically include taxes and common area maintenance charges (known as CAM charges). CAM charges in a commercial lease are typically added on to base rent as additional rent. A landlord typically will try to pass through as much of the overhead as possible through CAM charges. It is common to find administrative and maintenance fees, costs for repair and replacement of roofs, lighting, plumbing, electrical wiring, HVAC, etc., for the common areas. How can a prospective tenant minimize the CAM charges? A prospective tenant can attempt to negotiate a cap on CAM increases yearly, a fixed fee of CAM charges (typically the cap and fixed fee will exclude snow removal in northern climates), exclusions to items that the landlord may pass through to the tenant (for example, exclude costs due to the landlord's or another tenant's negligence), among others. Read more »