Entrepreneurs: Here’s a look, from a legal perspective, at what to consider if you think a franchise might be a way to start a business.
- Why a consider purchasing a franchise
- Proven business model
- Market recognition
- Advertising strength
- Might be easier to finance
- A “Franchise” is an oral or written agreement, either express or implied, which provides all of the following:
- Grants the right to distribute goods or provide services under a marketing plan prescribed or suggested in substantial part by the franchisor.
- Requires payment of a franchise fee to a franchisor or its Affiliate.
- Allows the franchise business to be substantially associated with a trademark, service mark, trade name, logotype, advertisement, or other commercial symbol of or designating the franchisor or its affiliate.
- What a franchise is not
- A guaranty of success
- A job
- A recipe (but it might include recipes)
- Due diligence on Franchisor
- Check their financial capability
- Check their reputation
- Ask other current franchisees
- Ask business rating services like Better Business Bureau and/or Iowa Business and Industry
- Ask FORMER franchisees
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