The contract between the two parties usually benefits the franchiser far more than thefranchisee. The franchisee is generally subject to meeting sales quotas and is required to purchase equipment, supplies and inventory exclusively from the franchiser.As a franchisee, the franchiser often has the right to terminate your business if it fails tooperate according to the agreement, becomes delinquent on royalties, or violates other contract specifications.
Seek Professional Help
The tax rules surrounding franchises are often complex, and an attorney, preferably aspecialist in franchise law, should assist you to evaluate the franchise package and taxconsiderations.An accountant may be needed to determine the full costs of purchasing and operating the business as well as to assess the potential profit to the franchisee.
Get More Information
If you're considering buying a franchise, you should take advantage of the manyresources that are available to help you develop a your business strategy.
Franchise and Business Opportunity Rule: Buyers' GuideOffers a guide to the Federal Trade Commission's (FTC) Franchise and BusinessOpportunity Rule, which requires franchise and business opportunity sellers to give youspecific information for making an informed decision.
Franchise and Business Opportunity Rule: FAQs for BuyersLists most frequently asked questions and answers about franchise and businessopportunities, including information on how to get a pre-sale disclosure document and legal assistance.In addition, it's important to know which rules apply to the company that is selling youthe franchise. The more you know about this company's requirements, the better informed you are when evaluating its opportunities.The five most frequently asked questions about franchise opportunities are:1.
Where can I get a company's pre-sale disclosure document?2.
How can I find out about complaints against a company?3.
How can I file a complaint against a company?4.
How do I know what must be included in a franchise disclosure document?5.
How can I find a lawyer who specializes in franchising?2