Franchise Law & Litigation
The first, which rarely happens, is that the business model is ingenious, the market is wide open, the terms of your agreement with your franchisor are reasonable, you get in early and make a fortune.
The second, which often happens, is that the business model is legitimate, but by the time you’re done paying all the fees to the franchisor each month plus your local expenses to operate the business, and fighting off all the other franchisees who are way too close to you, the profits are slim, the break-even point is a year or two off, and realistically you’re not truly seeing the benefit until you own quite a few locations.
The third and most unfortunate option is that you just lose your life savings and have to file bankruptcy on all the loans the franchisor hooked you up with to finance your investment to begin with. This is also a very common occurrence and it happens for many different reasons. Sometimes the franchisor just takes away your location and you’re stuck with your investment and none of the benefits, sometimes they authorize so many competing locations that you can’t survive and sometimes the business model doesn’t work for you, or doesn’t work at all. Sometimes the franchisor just goes belly up.
The bottom line is that buying a franchise is an intense negotiation involving a lot of financial analysis and legal due diligence. People do very well in franchising, but it’s usually not by accident. It’s usually through street smarts, industry experience and negotiating power.
Call us at 646-326-9971 for a free consultation and do yourself a huge favor.
There are 3 types of outcomes you can get when investing in a franchised business.