What are the Benefits of Buying a Franchise?
Owning a business is extremely rewarding, but it also requires in addition to hard work a great deal specialized knowledge. Investing in a franchise can provide the specialized knowledge at the inception and streamline some of this work, especially when you purchase a turnkey franchise that offers a business blueprint. The advantages of buying a particular franchise may include:
• Pre-determined business plan
• Training to perform the many tasks right the first time rather than have you painfully learn by trial and error
• Guidance in selecting a location
• Marketing and advertising blueprints
• Consistent product and service supplies and favorable pricing
• Resources available through a centralized support system
• a Brand which has consumer acceptance
Franchise ownership can be extremely lucrative for new business owners. Many first-time owners choose this option because it eliminates many of the unknown factors which make for successful operation. However, despite the “built in success” that often comes with franchise ownership, it is essential you work with an experienced business attorney from the moment you decide to invest in a franchise. He or she can help you determine which of the many franchise opportunities is right for you and protect you throughout the process, including purchase, operation, and where applicable, leasing of a facility.
Why Do I Need an Attorney to Help Me Acquire a Franchise?
There are numerous things to consider when you want to acquire a franchise or purchase a franchised business. Once you have finalized your purchase, the need for an experienced business attorney does not end. The attorney may
• Assist you in selecting the form of business organization-limiting liability companies;
• If you are going to have one more “partners”, assist you to focus on important issues to be set forth in a shareholders or limited liability company agreement and in negotiations with your “partner(s)”.
• Assist you in selecting an accountant to assist in the reparation of cash flow projections, review payroll services dangers, including non-compliance with technical requirements
• Assist you in find insurance coverage, rather than blindly using the insurance agent recommended by the Franchisor or others
• Review contract language with you so you understand the initial franchise agreement and any other contracts related to your business
• Review real estate leases and proposed forms of personal guarantees
• If you are purchasing a franchised business, cover the necessary issues which will be set forth in an Asset Purchase Agreement
Owning a business, even when it is sold to you as a turnkey franchise, requires a great deal of knowledge and understanding. An attorney can assist you in navigating the complex world of business ownership.
How Can an Attorney Help You Sell a Business?
No matter what size your business, if you decide you want to sell it you need to be represented by an attorney. Preparing for the sale of a business begins the day you take ownership of that business. Your mind might not be on preparing for a sale, but an experienced attorney will be able to look into the future and take the necessary steps now that will make your business saleable down the road.
In addition to everything an attorney is able to do throughout the life of your business, he or she can also assist you in dealing with arranging its sale. There are numerous things that go into the sale of a business, from protecting your interest to ensuring the next owner is ready for success.
An attorney is able to protect confidential information related to your business and its employees, obtain third party consent to help you close the sale of the business as affordably as possible, and navigate complicated leases that may or may not promote the sale of a business. Attorneys are also able to negotiate environmental contingencies related to the business and cleanup costs, and deal with agreements with third parties, including suppliers, employees and sales representatives and distributors.
What Should I Know about Limited Liability Companies
New Jersey’s Revised Uniform Limited Liability Act (“RULCA”) applies to any LLC formed on or after March 18, 2013, and beginning on April 1, 2014, it applies to all LLCs formed before March 14, 2013 pursuant to the New Jersey Limited Liability Company Act (the “Prior Act”). Since changes might affect your business or a business you are interested in purchasing, it is essential you review with your attorney and understand the issues covered in the act. These include management, Member voting and distributions. For instance, under RULCA, distributions and allocations of income and losses to members are per capita instead of in proportion to the agreed value of their respective capital contributions.
There are also changes regarding indemnification. RULCA has requirements, in part modeled on the provisions of New Jersey’s Business Corporation Act, for an LLC to indemnify and hold harmless members and managers of the LLC, which requirements are mandatory unless the Members provide otherwise in the Operating Agreement.
Finally, there were updates to items related to remedies for oppression and voluntary withdraw of a member.