When opening a franchise, you have many important choices to make. Some decisions you might make on your own, while others require assistance from someone with specific knowledge. Consider management decisions vs. legal decisions when starting and operating your franchise.
Starting Your Franchise
In the early stages, a new franchise owner needs to:
- Review market analysis and business-related research to make sure their company has the possibility of being viable.
- Choose a franchise, based on factors like initial costs and potential profitability.
- Decide on a business structure, like a partnership or corporation.
The first two decisions are largely management decisions. However, choosing a business structure is more of a legal decision.
Your business lawyer may look at the following factors when advising you on business entities:
- Ease of formation.
- Initial Costs.
- Ongoing Costs.
- Liability.
- Taxation Issues.
Business structure is a legal decision that could have a long-lasting effect on both your business and you.
Operations: Management Decisions or Legal Decisions?
How you choose vendors and attract clients generally is a management decision. However, your interactions with that vendor or client usually involve legal decisions:
What type of contract will you use? It’s best to have an attorney prepare your contracts.
When you hire key employees (a management decision), will you ask them to sign employment contracts and non-compete agreements (drafted by your corporate counsel or lawyer)?
Going into business with co-owners might be a management decision, but your legal representative usually should prepare partnership agreements and buy-sell agreements.
Operating a Franchise Is a Mixture of Both Management and Legal Decisions.
Be sure you are making only management decisions and not legal decisions, without the advice of an experienced business attorney. An experienced business lawyer knows how making the wrong legal decisions could affect your company’s future.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. we represent clients throughout South Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, and surrounding communities.