are when companies like Coca-Cola and Sealmaster grant an organization the tight to manufacture the product itself. These franchises are allowed to sell the public to the public under the franchiser's name. Generally, these franchises are food and beverage industries although it can apply to other products.
Business Format Franchising - The last type of franchising is the most popular form. With business format franchising, the company sets up a very particular business model and allows other companies to use it. They allow the new franchise to have access to a significant amount of assistance in managing the company. To be the ideal candidate for this form of franchising, the business should have some of the following characteristics:
- Ease of duplication
- Exact procedures
- Inexpensive operation
- Widespread appeal
- Unique concept and ease of operation
Businesses do not have to have all of these characteristics, but should possess several of them. Companies like McDonald's and Dunkin’ Donuts have had a track record of success at using the business format model of franchising.
Advantages of Franchising
When a company decides to start a franchise, they give up a lot of the control over their companies. Although they reduce the amount of risk they have during the expansion, the franchisor has to deal with not being able to micromanage the operation of each individual business.
The franchisor gets to spread out the capital costs of expansion and can often expand more rapidly. Individual business ownership is more accessible to the average citizen and the brand can also be rapidly developed across a broad geographic area.
Most businesses choose to franchise because these benefits far outweigh the costs. For a franchisor, there will always be a risk that the brand name could be damaged and the individual units will not be easily controlled. The franchisee also has to face any negative consequences of the franchise agreement.
A new franchise owner will not have the control over their business that a normal business owner would. In addition, they will have to pay back fees to the franchisor regardless of the level of profit.
Why Get a Franchise Lawyer?
Starting a franchise can be a daunting process. Franchisers and franchisees both have to comply with a number of laws governing the regulation of franchising. As you make the decision to purchase or sell a franchise, it is important to understand all of the terms in the documents going into it.
As you search out an attorney, make sure that the person has experience working franchises. From the Uniform Franchise Offering Circular to every document that follows, this NYC Franchise Lawyer will be able to understand the specifics of each situation. Having an attorney means that you are far more likely to have a better deal negotiated on your behalf.
They can also advise you on the fairness of the franchise agreement. From assisting you with creating your business entity or negotiating leases, a franchise attorney in NYC is a key supporter in a quest for franchise ownership.