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Recent Blog Posts

Making money as a franchisor: Advertising Fees

This post is the fifth installment of the post dated March 17, 2015, titled “How Do I Make Money as a Franchisor?”  This installment will treat Advertising Fees. Most franchisors charge “Advertising Fees,” or “Ad Fees.”  “Ad Fees” are continuing fees franchisors charge franchisees for advertising and promotional efforts by the franchisor. Ad Fees may be… Read More »

Making money as a franchisor: Development Fees

This post is the fourth installment of the post dated March 17, 2015, titled “How Do I Make Money as a Franchisor?”  This installment will treat Development Fees, sometimes known as “Territory Fees.” Most franchisees want to operate more than one outlet, and most franchisors want them to do so.  There are many advantages to… Read More »

Making money as a franchisor: Royalties

This post is the third installment of the post dated March 17, 2015, titled “How Do I Make Money as a Franchisor?”  This installment will treat Royalties. Most franchisors charge a “Royalty.”  The “Royalty” is the continuing fee franchisors charge franchisees for the license to use the trademarks and the system. Royalties are usually based on… Read More »

Making money as a franchisor: Initial Franchise Fees

This post is the second installment of the post dated March 17, 2015, titled “How Do I Make Money as a Franchisor?” Most franchisors charge an “Initial Franchise Fee.” The “Initial Franchise Fee” is the up-front fee franchisors charge for the purchase of a franchise. Franchisors that I represent have charged Initial Franchise Fees that… Read More »

How do I make money as a franchisor?

I spent several days last fall touring colleges with my daughter.  It was a discouraging experience, for one reason.  Every college had chosen five or ten students to speak with parents.  The colleges selected the students, presumably, to showcase the college’s values and priorities.  Virtually every student proudly announced, “After graduation, I want to work… Read More »

Why would I want to franchise?

There are three main reasons why you would want to franchise your business: Better use of your skills Efficiency Money Better Use of Your Skills Personnel managers have a guideline: “In your first year on a job, you will learn 80% of what you are ever going to learn about that job.” If you have… Read More »

A prospective franchisee wants me to send his attorney a copy of the franchise agreement in Word. Should I?

I avoid sending franchise agreements in Word.  I prefer to send them in PDF, to help me control the negotiation process.  Here’s why. A franchisor client sent its franchise agreement to a prospect’s attorney in Word.  The attorney revised the agreement and sent it back to my client.  When my client sent it to the… Read More »

Should I Have Prospective Franchisees Get an Attorney?

As a general rule, “yes.” A sophisticated business professional may already have an attorney.  However, if the attorney is not a franchise specialist, you should suggest that the attorney bring a franchise specialist into the deal on a consulting basis.  If your prospect is not a business professional, you should definitely recommend that he or… Read More »

Do Franchise Agreements Have to be Long?

No.  Franchise agreements can be short.  The shortest franchise agreement I currently use is 8 pages (plus 9 pages of exhibits, for a total of 17 pages).  The longest I use is 71 pages (plus 103 pages of exhibits, for a total of 174 pages). Why is one so short and the other so long? … Read More »

Which is Best: Arbitration or Litigation?

Neither is “best.”  “Best” is where the franchisor and franchisee have a good enough relationship that if a problem arises, one picks up the phone and calls the other.  They resolve it without the need for attorneys.  However, it takes two to tango.  We all know people who will not take “yes” for an answer…. Read More »