Franchise Mistakes to Avoid: Not Hiring a Lawyer
Posted on: October 17, 2017 by RMS Hospitality
Franchise Ownership Pitfalls > Why Every Franchise Owner Must Have a Lawyer
This series of posts has been dedicated to enlightening novice franchise owners on the crucial mistakes to avoid. First, franchise owners should understand that they are not independent business owners and do not have the freedom to do as they please. Next, a franchise operation is not guaranteed to succeed. The more knowledge franchise owners have, the better suited they are to succeed, which brings us to our last mistake to avoid: failing to hire a lawyer. In this post, we’ll cover the reasons why any new franchise owner should hire a lawyer to ensure everything is legal and correct. Next, secure the operation with the best Franchise Select Insurance Program available.
They share critical information.
According to Entrepreneur, all prospective franchise owners are required by law to receive the Franchise Disclosure Document (FDD) before they actually buy the franchise they’re interested in.
This 150- to 200-page document covers everything that the Federal Trade Commission (FTC) feels that you need to know about the franchisor. It’s important to be intimately aware of everything in the FDD, as there are certain restrictions and obligations you’ll have as a franchisee and you could be terminated if you don’t abide by them.
They provide entity guidance.
Experienced franchise attorneys can provide information on how franchise owners should categorize the business. Inquire about a Limited Liability Corporation (LLC), C-Corporation, or Subchapter S Corporation.
They provide legal guidance in times of disaster.
Like we mentioned previously, owning a franchise does not equate to success. Therefore, if the business is failing, or if the franchise owner needs to close it down, the lawyer can provide legal guidance to ensure the process goes smoothly.
About RMS Hospitality Group
At RMS Hospitality Group, we strive to protect each facet of franchises. For decades we have provided quality insurance solutions, business consulting, and aggressive claims management for businesses nationwide. As a testament to our experience, we were appointed in 1994 as one of the few “McDonald’s Approved Vendors” for franchises nationwide and became the largest broker in the system through the decade. We are also proud to announce that we are recognized as a Dennys Franchise Association Allied Partner. For more information about our comprehensive list of products, we invite you to contact us today at (516) 742-8585.