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Hire a good franchise lawyer to start - but here are the legal basics in the US:
· Determine what entity will be the franchisor – existing or new entity
· Pursue registration of your trademark with the United States Patent and Trademark Office
· Develop a Franchise Disclosure Document – 23 items of disclosure (this requires securing all current information about the company and other information necessary for the Franchise Disclosure Document)
· Develop all agreements that a franchisee would have to sign – Franchise Agreement, Development Agreement and any miscellaneous agreement
· Develop operations and training manuals
· Registration of the Franchise Disclosure Document in registration states there are 14 states
The process can take anywhere from 3-6 months – typically it is the owner who can make the process longer as there are many legal and operational decisions to make that may not have been anticipated.
financial statements, if you do not currently have audited financial statements and have never sold franchises, you will need to prepare an unaudited opening balance sheet. After the first year of operation, assuming you do not currently have audited financial statements and have never sold franchises, you will need to have an accountant prepare audited financial statements – I cannot quote a price for this as it all depends on the complexity of the company, history, and prior financial controls and methodology – so you need to ask a CPA that question. If you already have audited financial statements or have sold franchises in the past, you must have audited financial statements from the start.
Franchise Disclosure Documents must be updated annually and whenever there is a “material change” during the year.
To get a good overview you may want to read a book I wrote for franchise-purchasers How to Buy a Franchise -- @ How to Buy a Franchise
Written 36w ago • Not for Reproduction
Category: Personal Finance