• Alex Kleyman

The Ultimate Guide to Franchising Your Business

Businesses around the world had to deal with multiple issues on the financial and legal front. Franchising your business New York wide or elsewhere is also one of them. People who are new to franchising and are not even familiar with its basics may see it as an intimidating venture. Of course, if you don’t really know much about it, you will be definitely clueless about how to start franchising your business, what are the appropriate steps, and how to figure out whether you are doing it the right way or not? However, proper guidance from an experienced franchising attorney like the ones offered by Kleyman Law Group, New York, can help you get through the franchising phase pretty easily.


In the given content, we are taking a deep dive into the legal requirement for franchising your business, the role of franchising lawyers New York bound or elsewhere, the legal steps involved in the process, and several tips regarding the sale of your franchises. Read on to know more about how to franchise your business New York wide or anywhere else. Further details are discussed below:


What is Franchising in Business?


When it comes to the definition of franchising in business, simply put, franchising refers to a legal and business relationship to help business owners grow their business. The creation of a franchise relies on a legal agreement that includes the license of a trademark, the payment of a specified fee, and control over the operations of that particular business. The process of franchising your business means drafting legal documents such as pre-sale disclosures, and the operational requirements that are fulfilled as per the implemented laws of franchising.


You will allow the franchises of having the right to develop and open new locations using your trademarks, business systems, suppliers, training, and ongoing support. Franchisees are bound to pay you fees, which include the initial franchise fee and the ongoing royalties. Moreover, the franchisees will hold the right of investing the capital required to open new locations under your brand. If you succeed in franchising your business properly, it will be a win-win situation for you and all the parties involved in the process of franchising.


What is Franchise Law and What is a Franchise Disclosure Document (FDD)?


In the United States, the process of franchising is regulated by various franchising laws implemented by the state and the federation. Franchising requires proper compliance with these laws to stands firm and unchallenged by any external or internal entity. Moreover, these franchise laws establish a proper pathway for you regarding how to franchise your business?


Now coming to the FDD or franchise disclosure document is a document that holds the legalities required to sell franchises. You need to have FDD, as it is required as per the federal and state franchise laws. Moreover, it serves as the foundation for your franchise. If you plan to franchise your business, then you are legally bound to provide your prospective franchisees with the FDD of your business at least 14 days before signing the final agreement with your franchisees or accepting any payment.


This FDD consists of 23 mandated sections, each section in the FDD is legally referred to as an “item”. All the items in the FDD serve the purpose of informing your prospective franchisee about you, your franchise, and various legal obligations between you and your future franchisees. The information about legal obligations consists of information such as royalties, territories, start-up costs, and various other things. In simple terms, an FDD or franchise disclosure document is a package of all the legal stuff before you sell a franchise of your business. This FDD should be updated on a yearly basis at least.


Franchising Your Business:


While franchising your business, you need to make sure that the franchise disclosure document or FDD of your business is updated at least manually. You need to get it approved and registered with state regulators before offering or selling a franchise in a franchise registration state. However, it should be noted that there are some states that demand franchise fillings or business opportunity filling before you can actually sell a franchise.


Franchising your business means that you have taken all the essential legal and financial measures to sell franchises of your business, support those franchises, and grow your brand. These measures include the involvement of a franchising attorney who is experienced in preparing and issuing FDD that complies with franchise laws enforced by the state and the federation. In case, if you are dealing with states that demand FDD registration and fillings, you need to register or file your franchise disclosure document with the state to have the right of selling franchises.


This entire process may take up to 120 days for you to become a legal franchisor who is capable of offering and selling franchises. However, it is not all, the actual process starts when you actually franchise your business


How to Franchise a Business?

How to Franchise a Business? | Kleyman Law Group

Here we will discuss some necessary steps to franchise your business. These steps are listed below:

  • Figure out whether franchising your business is the right approach for the growth of your brand or not. Consider, your business, its systems, your personal objectives first, and then determine whether they align with the franchising strategy or not? After all, you are going to be responsible for recruitment, training, and support to the franchise with the growth of your brand.

  • Make sure your FDD is compliant with all the federal and state laws regarding the franchising process.

  • You should also prepare a confidential operations manual and provide your franchisees with this confidential manual. This manual will take account of all the system requirements and the data required to develop, open, and run the franchised business.

  • Make sure you register your trademarks properly with the concerned legal authority. In the United States, the United States Patent and Trademark Office registers trademarks.

  • You also need to form a new franchise entity, it can be either a corporation or a limited liability company. This company will be responsible for selling and supporting franchisees. Moreover, it will build systems to ensure the growth of franchises and your business.

  • Make sure you have registered and filled your FDD wherever it is required.

  • Formulate the strategy for sales of your franchises and specify a budget.


How Much Does it Cost to Franchise Your Business?


This is a valid question and often asked by various business owners. The answer is not as simple as it may seem. The process of franchising your business can be broken down into stages. These stages are the franchise development stage and the franchise sales stage, respectively. Stage 1 can be further broken down into three distinct phases, these phases are competitively adjusting your franchise offering and the underlying rights and obligations between you and your franchisees, preparing your FDD, and taking other legal measures to become a legal franchisor to start selling your franchises the right way, and finally the formulation of your operations manual. All these tasks can cost you somewhere between $18,500 to $84,500.


The variations in the cost mostly depend on whom you work with. Therefore, you need to be careful while choosing a New York franchise lawyer or elsewhere.


Speak to an Experienced Brooklyn, New York Franchise Attorney:


At Kleyman Law Group, Brooklyn, New York, we offer the best franchise lawyers who can help you get through the whole franchising process easily and the right way. Therefore, before you search “Franchise Lawyers Near Me” on the web, remind us and give us a call. We will guide you through the entire process, and make everything including preparation and registration of FDD totally smooth and seamless for you. Our team of experienced New York business litigation attorneys is always ready to guide you regarding how to franchise your business and give their honest suggestions while following the fair price policy. We deliver quality services to our clients without any kind of compromise.


Our New York attorneys have made their name because of their experience and expertise in all kinds of business litigation matters, including franchising your business. So, whenever you need a quality franchising lawyer in order to get guidance about how to start franchising your business, give us a call and book your appointment with Kleyman Law group, New York! We are always at your service!


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