Franchise LawIn the absence of case

Franchise Law
In the absence of case law that precisely addresses franchising, the courts tend to apply common-law principles and appropriate federal or state statutory definitions and rules. Characteristic associated with a franchising relationship are similar in some respects to those of principal or agent, employer/employee, and employer/independent contractor relationship, yet a franchising relationship does not truly fit into any these traditional classification.
Evaluating the opportunities
One research study examined the relationship between the base fees and royalties paid to the franchise’s overall value. The findings indicated that the age of a franchise, number of retails units, concentration in the state, and national representation are all reflected in the size of base fees and royalties. In addition, to ensure an adequately protected investment, an evaluation of all franchise opportunities must be undertaken.
Learn of opportunities
One of the first things a franchisee must do is to find a reliable source of information about franchising opportunities. Some of the most readily available sources are newspaper, trade publications, and the internet. Entrepreneur magazine carries advertisements of franchise opportunities, and exhibitions and trade shows are held by franchisors from time to time in various cities. Finally, franchisors themselves offer information on specific opportunities although, in this case, one needs to beware of promises that exceed what may be delivered.
Investigate the franchisor
The prospective investor should get as much information as possible on the franchisor. So many people have lost their life savings in franchise schemes that, except when dealing with a long –established franchisor, one is best advised to enter the investigation prepared for the worst. Remember: no reputable franchisor will sell a franchise without ensuring that the buyer is capable of operating it successfully.
Seek professional help
If the franchisor passes the initial investigation and offers a franchise contract, the prospective franchise should first take it to a qualified attorney. The attorney will understand the terms of the agreement and can explained any penalties or restrictive clauses that limit what the franchisee can do. Of major importance are contract provisions related to cancellation and renewal of the franchise. If the franchise can be purchased back by the franchisor at 20 percent of the initial fee, the lawyer need to examine carefully how easily the franchisor can terminate the agreement.
Other consideration include the franchise fee, the percentage of gross revenue to be paid to the franchisor, the type and extent of training to be provided, the territorial limit of the franchise and the provisions for supplying materials to the unit. legal and financial professional will help the prospective franchisee answer some very important questions.
The decision: it’s up to the entrepreneur
After the prospective entrepreneur has gathered all of the necessary information, it is up to him or her to make the final decision on the matter. As with buying an ongoing business, however, the series of “right question” outlined previously can help.

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Franchise LawIn the absence of case law that precisely addresses franchising, the courts tend to apply common-law principles and appropriate federal or state statutory definitions and rules. Characteristic associated with a franchising relationship are similar in some respects to those of principal or agent, employer/employee, and employer/independent contractor relationship, yet a franchising relationship does not truly fit into any these traditional classification. Evaluating the opportunitiesOne research study examined the relationship between the base fees and royalties paid to the franchise’s overall value. The findings indicated that the age of a franchise, number of retails units, concentration in the state, and national representation are all reflected in the size of base fees and royalties. In addition, to ensure an adequately protected investment, an evaluation of all franchise opportunities must be undertaken.Learn of opportunitiesOne of the first things a franchisee must do is to find a reliable source of information about franchising opportunities. Some of the most readily available sources are newspaper, trade publications, and the internet. Entrepreneur magazine carries advertisements of franchise opportunities, and exhibitions and trade shows are held by franchisors from time to time in various cities. Finally, franchisors themselves offer information on specific opportunities although, in this case, one needs to beware of promises that exceed what may be delivered.Menyelidiki DiperolehCalon investor harus mendapatkan informasi sebanyak mungkin pada diperoleh. Begitu banyak orang telah kehilangan tabungan hidup mereka dalam waralaba skema itu, kecuali ketika berhadapan dengan panjang – didirikan franchisor, salah satu terbaik disarankan untuk memasukkan penyelidikan dipersiapkan untuk yang terburuk. Ingat: franchisor terkemuka tidak akan menjual waralaba tanpa memastikan bahwa pembeli mampu beroperasi berhasil.Mencari bantuan profesionalJika diperoleh melewati penyelidikan awal dan menawarkan kontrak waralaba, waralaba calon harus pertama mengambil itu untuk pengacara yang memenuhi syarat. Pengacara akan memahami persyaratan perjanjian dan dapat dijelaskan hukuman atau Pasal-pasal yang membatasi yang membatasi apa yang bisa lakukan franchisee apapun. Penting adalah ketentuan kontrak yang berhubungan dengan pembatalan dan pembaharuan waralaba. Jika waralaba dapat dibeli kembali oleh diperoleh di 20 persen dari biaya awal, pengacara harus memeriksa dengan hati-hati bagaimana dengan mudah diperoleh dapat mengakhiri perjanjian.Pertimbangan lain termasuk biaya waralaba, persentase pendapatan kotor yang harus dibayar untuk diperoleh, jenis dan tingkat pelatihan akan diberikan, batas teritorial waralaba dan ketentuan untuk memasok material untuk unit. profesional hukum dan keuangan akan membantu Calon franchisee menjawab beberapa pertanyaan yang sangat penting. The decision: it’s up to the entrepreneurAfter the prospective entrepreneur has gathered all of the necessary information, it is up to him or her to make the final decision on the matter. As with buying an ongoing business, however, the series of “right question” outlined previously can help.