Understanding the Basics of Franchising Law

Franchising is a popular way to do business today. For the entrepreneur, franchising law allows them to purchase a business that is already proven and can often be marketed primarily on the familiar. This is true of many fast food and coffee chains, hotels and car dealerships.

For those looking to invest, franchising law allows them to expand the business to the point where it is ready for resale or to be taken public. If you are interested in getting into the area of business, there is much you need to know about franchising law before you are ready to make your leap into franchise ownership.

If you are considering a franchise purchase, there are some areas of franchising law that will protect your decision. First, there are franchising laws governing what information must be disclosed to a business or individual who is interested in purchasing a franchise.

This information includes all the necessary facts and figures that will allow the prospective buyer to make a savvy decision about his franchise purchase. According to franchising law, this information must be presented at least five days prior to the purchase date, allowing the prospective buyer sufficient time to weigh his decision carefully before taking the plunge into franchise ownership.

Some states also have their own franchising law that requires franchise sellers to register with the appropriate government agencies. If you are considering a franchise in one of these states, it is important to follow the franchising law and make sure the business is properly registered before continuing with the sale.

However, it is important to note that following franchising law to the letter will not necessarily guarantee success of the franchise you purchase. Instead, it will ensure that the purchase of your business will be legal and binding, so you can conduct your business free and clear.

Because franchising law can be a complex and sometime confusing maze to muddle through, it is important to hire an attorney who specializes in franchising law to walk you through the process.

To ensure that the attorney you choose specializes in franchising law, ask how many franchise transactions he has handled over the past year. You can also ask for references of past clients who have sold or purchased franchises with his services.

Franchising law can be confusing, but the right attorney can make the entire process much easier to navigate. If you are considering the purchase of a business, contact an attorney specializing in franchising law today.

Einbinder & Dunn (www.ed-lawfirm.com) specializes in franchise law. Visit their website to find a qualified franchise lawyer and ensure the safety of your business. Art Gib is a freelance writer.

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