The answer may be “No.”
There are many advantages to structuring your business, at its inception, as a franchise. Most of these advantages fall within the scope of “doing it right the first time.” Franchise laws are complex, and complying with them diverts resources from other aspects of your business. However, there are also laws governing alternatives to franchising. These laws are not consistent from state to state: this inconsistency adds costs. In fact, the cost of an alternative to franchising may be higher than the cost of franchising.
In addition, months—or even years—after you enter into a business relationship with a third party, the third party may claim that you actually sold a franchise, and that you did not comply with the laws governing franchising. The third party may also claim that even if your business did not start as a franchise, over the years it changed and became one. If the third party prevails, your liability could be significant.
Nonetheless, there are alternatives to franchising. The suitability of these alternatives to your business may depend on the revenue you will need to meet your goals, the control you want to maintain over the business, your marketing programs, and other factors.
Other alternatives to franchising include:
We help clients structure their businesses where appropriate to avoid—legally—the laws governing franchising. A lawyer from The Johnson Franchise Law Firm can:
If you want to determine whether an alternative to franchising fits your business, contact The Johnson Franchise Law Firm today.