During the franchise-buying process, it’s important for you to use business experts.
Buying a franchise is a big deal; you have a lot at stake.
The way to minimize your risk is to use business experts at every turn and to do great franchise research.
Use These Business Experts
1. Small Business Accountant
Hire an accountant-especially one who’s familiar with small business structure and taxation.
A good accountant is a lot more than a number cruncher. Good accountant know how businesses run, and how to keep expenses in check. Accountant can provide many different levels of support. You have to decide how much you want.
Tax-related issues are a big part of running a business, and a good accountant can help you maximize your deductions. The more deductions (legal ones) you have, the less your franchise business will have to pay in taxes.
Ultimately, your accountant is someone that you should be looked at as a trusted advisor. Your accountant can help you evaluate your business plan, and make sure that you keep proper financial records.
2. Franchise Attorney
Hire an attorney who’s expertise includes franchise contract work-a franchise attorney. Make sure that he or she is up to date on all of the current franchise laws in your state.
Before you buy a franchise, you’ll receive what’s called a Franchise Disclosure Document. (FDD) Franchisors are required to send this to you before you sign a franchise contract or send in any money. Once you get it, send it over to your franchise attorney’s office. The FDD contains many items that need to be looked at.
The FDD includes information about:
· The Franchisor, its Predecessors, and its Affiliates
· Business Experience
· Initial Franchise Fee
· Other Fees
· Initial Investment
· Restrictions On Sources Of Products And Services
· Franchisee’s Obligations
· Franchisor’s Obligations
· Patents, Copyrights and Proprietary Information
· Obligation To Participate In The Actual Operation Of The Franchise Business
· Restrictions On What The Franchisee May Sell
· Renewal, Termination, Transfer And Dispute Resolution
· Public Figures
· Earnings Claims
· List Of Franchise Outlets
· Financial Statements
· The Franchise Contract
A good franchise attorney shouldn’t need more than an hour or two to go over the FDD.
You’ll want their opinion on this 200-page document. They know what to look for, and will discuss any concerns they may have.
Lower your risk; use business experts before you sign anything.