While investing in a franchise seems like a simple and straightforward way to enter into the business community, there are many issues that a qualified law firm can help a future small business owner navigate.
Franchises in Texas can be extremely expensive and most franchise agreements require a significant initial investment and a huge amount of liquid capital cash on hand.
How can I protect my investment?
There is no way to guarantee that your franchise will be successful. Much of the franchise’s success is dependent on the franchisee’s involvement, as not all franchises are considered equal.
Experts advise that potential investors carefully consider several factors before deciding to invest. Some of the key things to consider when investing include:
- Location of the franchise
- Foot traffic through that location
- Competing businesses in the area
- Franchisor’s experience and track record in the business community (e.g., pending litigation)
- Costs necessary to become involved in the franchise, as well as continuing costs
- Hours needed to maintain the business
In addition to these factors, you should also research regulatory protections that specifically relate to franchises. These regulations often vary depending on the industry you have entered. Heavily regulated franchises include common carriers and other businesses that deal with the general public.
No investor should invest in a franchise without doing their due diligence. Failing to properly protect your investment could result in catastrophic financial losses. Consulting with a business law attorney may be the best way to ensure that your significant investment is protected.