There are no little things.

Corporations and limited liability companies in the State of Iowa are required to appoint a registered agent and office within Iowa to receive service of process. We are able serve as your business entity’s Iowa designee to accept official documents on your behalf such as original notices for lawsuits and communications from various Iowa state agencies. If your business is a corporation or LLC, we also provide services to file your biennial report with the Iowa Secretary of State office.

You may see other organizations and businesses on the Internet that provide registered agent services. Many of those organizations are unable to provide you with legal advice and may not fully understand the implications of Iowa law. Our law firm is located in the State of Iowa and we provide these registered agent services for companies and franchises in the State of Iowa.

You can also serve as your own registered agent if you are an Iowa resident, but we have found that individuals often do not understand the consequences of a failure to respond within the applicable deadlines set forth in lawsuits and other communications served. It is best practice to have an attorney serve as the registered agent so that a professional familiar with responding to lawsuits and other communications has the opportunity to review such documents immediately rather than waiting until the 11th hour or until it is too late.

It is a small investment to protect your business. Amazingly, the registered agent is one of the  “little things” often overlooked by business people. A small fee for a business can prevent a huge headache. The lack of attention to filings and other important communications can have disastrous consequences for a business or franchise including a default judgment where monetary damages are entered against your company without the opportunity to defend a lawsuit filed against you. Unfortunately, I have seen it too many times to count.

So if you need a registered agent in Iowa, we can help.


Recently I reviewed a franchise offering for a prospective franchisee. This particular franchise made financial performance representations in Item 19 of the Franchise Disclosure Document (FDD). The financial performance representations revealed some impressive numbers at first glance. After all, the highest performing franchisee was earning in excess of million dollars per year. And the “average” franchisee revenue was nearly $700,000 per year. The problem? Only three franchisees in the system were earning the average revenue or greater. The rest of the franchisees were below the average revenue amount and the lowest had revenue of just over $100,000. The disparity between the franchisee earning the most and the franchisee earning the least was over $1 million per year. It was clear the top performing franchisees were propping up the revenue figures for the franchise system.

I much prefer franchises that deliver consistent success. While all franchise systems will generally have high performers and low performers, consistency of financial performance across all franchisees is a major factor in determining whether a new franchisee will have success. All too often I review franchise systems where far MORE than 50% of the franchisees are BELOW the average sales in the franchise. This means a small number of high performers skew the results and make the franchise system appear more successful. I know everyone wants to believe they are the best. But for purposes of reviewing FDD financial information, I suggest you concentrate on the averages. And not just average revenue itself. If the information is available in Item 19, concentrate on the number of franchisees that are hitting the average revenue. A low number of franchisees hitting the average is indicative of a franchise that is not delivering consistent results to franchisees.

The best franchises will deliver consistent results across the board. If you want to own your own business and dream big, I say more power to you. But don’t let those dreams color your expectations. Franchise businesses do fail. Profits are not guaranteed. Set yourself up for a better chance of success by choosing a franchise that is a consistent winner.

As a lawyer representing both franchisors and franchisees I have somewhat of an unique perspective on franchisor / franchisee relationships. Most franchise lawyers tend to represent one side or the other. But it is somewhat rare for a franchise lawyer to represent both sides. I have spent over two decades now reviewing franchise agreements. I started out representing primarily franchisees, but as my law practice evolved, I turned to representing franchisors in developing their franchise systems. I have always believed that franchisors need to care more about their franchisees.  Franchisors often need to do more than just get their franchisees in business. All too often I have seen franchisors fail to support and guide franchisees. Instead, many franchisors look to the franchisee as a revenue source and not much more.

A couple of instances lately have done nothing to change my mind and prompted me to write this blog post. First, I reviewed a franchise agreement that was not just one-sided, but could only be described as incredibly restrictive against the franchisee. If there was ever a protection created for a franchisor over a franchisee, this franchise agreement seemed to have it. From a franchisor legal perspective, it was no doubt written by an experienced franchisor lawyer who had painstakingly taken the time to protect the client in almost every respect. But from a practical perspective, the franchise agreement could spell doom for a potential franchisee and signaled to me a hardened approach that did not bode well for a franchisee.

The next instance involved my discussion with a new franchisor. He told me his story of how he actually started in business as a franchisee. He explained to me how his former franchisor “sold him a bill of goods” and had failed to support him in any way after starting his business. And to make matters worse the franchisor made no concessions to allow him to stay in business when the economy turned poor in 2008. So his vow is to create his own franchise system that will use “almost the exact opposite approach” of his former franchisor.

Does it have to be this way? Do franchisors need these overwhelmingly restrictive franchise agreements? Do franchisors have some obligation to support their franchisees and help them through the bad times? A couple of my new franchisor clients say their sole focus is developing franchise brands that are franchisee-centered businesses. As one new franchisor describes, “my financial success will come if my franchisees are successful.” And while that seems like a simply thought most franchisors should have, I can tell you in experience that is not a common mindset. Many franchisors from what I can tell do not really care all that much about franchisees. What they care most about is receiving a fee. They care about protecting themselves against defaulting franchisees. And they care about their own interests often to the detriment of franchisees.

What I am NOT suggesting is that franchisors should put franchisees first. Of course franchisors need to protect their businesses and systems. Of course franchisors should be concerned about their own profitability. What I am suggesting is that franchisors take a franchisee-centered approach. What does a franchisee-centered approach entail? To me, it means having empathy for franchisees. It means practicing attentiveness to franchisees’ questions and issues. It means communicating regularly with franchisees (which remarkably does not occur with many franchisors). It means developing effortless experiences with franchisees in terms of ease of doing business, training, and helping franchisees innovate their businesses. And finally, it means adding value for franchisees so you have created franchisees for life.

For many franchisors this may require a shift in mindset. A mindset that is not so rigid like your typical franchise agreement along with system rules, but instead that is more of a growth mindset where there is an emphasis on learning what works and does not work. And may require franchisors to listen much more to franchisees in order to improve in the future. Those are the types of franchisors I want to work with and I think it is the type of franchisor most franchisees want to associate with as well. And in the end, it is my strong belief that Franchisors who can take this franchisee-centered approach will set themselves apart to dominate the competition.

I recently formed a corporation and within a short time I received a flyer in the mail from a company operating as IA Certificate Service. The flyer (see a similar one from a Mississippi article) explained that the next step for me after filing my Articles of Incorporation was to obtain my Certificate of Existence (the fine print did state this was optional but the language of the flyer would lead most unsuspecting new company owners to believe they needed to obtain it right away and contained a response date). The charge for this service was $67.50 and the “service” would send your hard copy certificate to you within two weeks.

Just know that obtaining a Certificate of Existence could not be easier and it only costs $5.00 to immediately download your Certificate of Service. Each company information page on the Iowa Secretary of State’s website contains a link to Print the Certificate of Existence. It is so easy I frankly would never consider charging a client a fee for the service.

Further, Certificate of Existence forms are not generally not needed unless and until requested from a third party. Examples of times you may need a Certificate of Existence include:

  • Registering your business in a different state;
  • Selling your business;
  • Obtaining a loan;
  • Registered with certain agencies.

Also  know that a Certificate of Existence is usually only good for a certain period of time with third parties. So, obtaining a Certificate of Existence, without a request from a third party to do so, usually isn’t going to do you any good because the Certificate of Existence time period would probably have expired if you are using a “service” like the one I described.

Bottom line, skip the “service”. You don’t need to pay the additional money for the Certificate of Existence. Simply download it yourself for $5.00 from the Iowa Secretary of State’s website if a third party ever requests it from you. Search the database for your Company’s name and then print the Certificate of Service from the link.

This is the final post in a series of posts on the Secret Sauce of Franchise Investing based upon an excellent article I read some time ago on what private equity likes to see before investing in a franchise. In this post I am highlighting the eighth ingredient which is whether the franchise has a runway for future growth.

Franchise investors will want to see whether there are enough open territories for expansion. Often, you will see a franchise that is concentrated in a certain region of the country. This may mean there is plenty of opportunity for the franchise to expand to different regions of the country. It is important though to identify the stage in which the franchise is in their expansion. Sometimes a concept only has appeal in that territory. For example, maybe a restaurant has appeal in the South but not necessarily in the Midwest. If you find a concept that has more universal appeal across geographies (discussed in a prior post in the series), then you can potentially hit a home run.

I have found it best not to chase business opportunities, whether franchise or otherwise. Don’t get into a hurry and make sure you are getting a reasonable deal. There are lots of times I have seen franchise concepts become hot and then the price goes through the roof for a territory. Often, the unit economics (discussed in a prior post in the series) no longer hold water because the investment buy-in has become too expensive for profitability.

I hope you find the series of posts on franchise investing informative. Please be sure to let me know if you have any questions if you intend to start or invest in a franchise.

I am blogging a series of posts on the Secret Sauce of Franchise Investing based upon an excellent article I read some time ago on what private equity likes to see before investing in a franchise. In this post I am highlighting the seventh ingredient which is whether the franchise has successful franchisees.

Good franchisors want franchisees to be successful and happy. But let me tell you from experience in practicing franchising law for over 20 years, not all franchisors are created equal. There are numerous franchisors with unhappy and struggling franchisees. Do not make the mistake in investing in such a franchise. Do your due diligence and interview franchisees before you invest your hard earned savings. If franchisees tell you the franchisor does not support them, or if franchisees wouldn’t do it all over again, rule out that franchisor. Because things are not likely to be different for you.

Franchisors need to do everything they can to make sure franchisees are successful. Much like having raving customers, franchisors need raving franchisees. Often it is a good sign when a franchise has many multi-unit franchisees. This suggests that franchisees were happy and impressed enough with their investment that they wanted to open additional locations. A franchise system with successful and happy franchisees is much more likely to be primed for growth and an ability to attract other franchisees to the system.

Always check online to see if you find numerous complaints about a franchise online in Google searches or on websites such as Unhappy Franchisee. If you see lots of complaints or indications of frequent litigation, you should strongly consider investing your savings in a different option.

I am blogging a series of posts on the Secret Sauce of Franchise Investing based upon an excellent article I read some time ago on what private equity likes to see before investing in a franchise. In this post I am highlighting the sixth ingredient which is good unit economics.

What are good unit economics? One franchise investor I know keeps it really simple. He tells me he always is trying to have each franchise location average net income of at least $100,000. That’s it. To him, that is good unit economics. So if you have 10 locations that net $100,000 on average, you now have $1 million in net income and then so on. But consistency is a key. Many franchisors may have a few high performing locations but have lots of dogs scattered throughout the concept. You need to research carefully whether franchisees are consistently successful on average.

In my experience, achieving that $100,000 net income threshold is challenging for lots of franchises including sandwich shops, ice cream / dessert franchises or perhaps even certain gym opportunities. You really need to choose wisely as Indiana Jones did when searching for the Holy Grail. A great place to look for new franchises that have good unit economics is a web site called Franchise Chatter. Franchise Chatter has a great section on “Franchise Earnings” together with a list of Top Franchises with sales of at least $1 million and another list of franchises with average sales-to-investment of ratio of at least 2:1. These are the metrics used by Franchise Chatter to determine good unit economics. It is interesting to see the successful franchises under these metrics. The Franchise Chatter Top Franchises list often differs from other franchise lists you might see.

Surprisingly, one place I do not rely on much for researching good unit economics is the Franchise 500 published each year by Entrepreneur Magazine.  The list tends to cover the “fastest growing” franchises but in my experience the information presented does not cover the type of unit economics necessary to make a good investment decision. And also based upon my experience, making the Franchise 500 list doesn’t mean all the franchisees in a given concept are successful. In fact, many of those franchises listed in any given year do not have good unit economics for franchisees.

So ultimately, whether you are looking to start a successful franchise, or invest in one as a franchisee, I highly recommend concentrating on good unit economics when examining the franchise opportunity. Don’t just look for the fastest growing concepts.


Back in January of this year, I started a series of blog posts regarding the Secret Sauce of Franchising Investing. I wrote the detailed posts on my first four “ingredients” and then Covid hit. I turned my attention to writing on issues impacting Iowa business relating to the government shut down, relief funding and other issues occurring due to the virus.. Then, I hunkered down helping clients through this terrible time period. As a result, I took my longest break from the blog since I started in 2006. But, I am back, and ready to get blogging on issues once again.

I wanted to touch on the “fifth ingredient” of the Secret Sauce for franchise investing which is whether the franchise has reached a critical mass of units. I know a lot of people want to find that new and fresh franchise. Who doesn’t want to get in on the ground floor of McDonald’s or Subway, right? While there can be a great deal of excitement with a new offering, professional investors are usually most comfortable investing in a franchise that has reached a critical mass of units. What is a critical mass of units? I think that number may vary depending upon the offering, but the example in the original private equity article mentioned 50 units as a good barometer for a critical mass.

Why is it important to have a critical mass of units? First it tells investors the franchise has had some reasonable success in attracting franchisees to pay fees and incur the risk of starting a new location. Second, if the locations have been open for some time, it demonstrates a longer-term viability of the concept. Third, the larger the system, the more resources the franchise will have to develop areas for further growth and marketing. And finally, it means the franchise has survived those initial growing pains that all new franchisors are sure to experience.

You may want to ask yourself, why be the guinea pig when you can let someone else take that risk?!



On Friday, March 27, the President signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. The components of the Act that help businesses are a part of a multi-faceted stimulus bill to assist businesses and individuals with the economic challenged caused by the Coronavirus. An excellent overview of the Act has been prepared by the Cline Williams law firm of Omaha, NE. So I would like to express my appreciation for their legal alert I received with the overview.

Some highlights of the CARES Act:

Small Business Assistance

  • SBA Loans obtained under the Act may be used for payroll—including paid sick, medical, or family leave, continuation of health care benefits, interest payments on mortgage obligations, rent, utilities, interest on pre-existing debt obligations and certain other expenses and obligations for the remainder of 2020.
  •  Loans under the Act must be made on or before June 30, 2020.
  • There will be no prepayment penalty on payments made before year end.
  • Loan administrators are to collect little or no fees.
  • Payments owed under loans may be deferred in almost all circumstances for up to 1 year.
  • Loans administered under the Act may qualify for partial or full forgiveness.
  • Maximum loan amount is the lesser of (1) $10 million or (2) 2.5 times the average monthly payroll cost during the year prior to the loan.
  • Generally, qualifying employers must have 500 or less employees and cannot have already received assistance under section 7(b)(2) of the Small Business Act for payroll expenses related to COVID-19; the Act specifically includes self-employed, sole proprietors, and independent contractors
  • Includes Emergency Economic Injury Disaster Loan (“EDIL”) grants up to $10,000 for payroll, sick leave, and other expenses and obligations. For businesses who receive an Emergency EIDL grant and later receive a Section 7(a) loan, the amount of loan forgiveness is reduced by the amount of the Emergency EIDL grant.

Small businesses who wish to apply for these loans can start here or I encourage you to reach out to your existing banker. Eligible entities are those with less than 500 employees, including the following: small businesses, 501(c)(3) nonprofit organizations, veterans organizations, certain tribal business concerns, eligible self-employed individuals, independent contractors, sole proprietorships and businesses in the accommodation and food services industry that have less than 500 employees per physical location.

For the purposes of determining the 500 employee threshold, applicants should include full time, part-time and other basis employees. General SBA affiliations apply except such rules are waived with respect to businesses in the accommodation and food services industry, franchises assigned a franchise identifier code and businesses licensed under Section 301 of the Small Business Investment Act.

Business Tax Assistance

  • Delay of estimated tax payments for corporations to October 15, 2020.
  • Delay all or a portion of payroll taxes until December 31, 2021 or 2022 depending on the circumstances.

Items for Employers

  • The Act amends the Families First Coronavirus Response Act (“FFCRA”) to: (a) expand eligibility for paid leave for certain rehired employees and (b) aid private employers in meeting their paid leave requirements under the FFCRA by providing advances of FFCRA payroll credits. Further instructions and forms are expected from the Department of Labor on the credits.
  • The Act creates a new “employee retention tax credit,” under which eligible employers may receive a refundable payroll tax credit for certain wages paid by employers during the COVID-19 crisis (subject to caps per employee and time restraints). See Section 2301. The tax credit is limited to those employers (a) whose operations were fully or partially suspended because of a governmental order “limiting commerce, travel, or group meetings” due to COVID-19; or (b) whose quarterly gross receipts have declined by more than 50% when compared to the same quarter in the previous year. Employers who receive loans under the Paycheck Protection Program (Section 1102) are not eligible for this credit.
  • The Act creates the Pandemic Unemployment Assistance program, which runs through December 31, 2020 and substantially expands available unemployment benefits for employees who have been laid off or furloughed.

Please also see assistance available through the State of Iowa in my prior posts on this blog.

For assistance I recommend you reach out to your existing banker, tax / accounting adviser or your business attorney.



The State of Iowa has now created a fund to help Targeted Small Businesses with no employees that have been impacted by the Covid-19 pandemic. The program offers eligible small businesses grants ranging from $5,000-$10,000 to businesses that are single owners with no employees that are also TSB certified, or have an application submitted to the Iowa Economic Development Authority (IEDA) by April 10, 2020 to become TSB certified.

The Iowa Center for Economic Success will review grant applications for eligibility and determine the grant amount by the level of impact including loss in sales revenue and employees.

The following documents are required for upload in the online application:

  • 3-month income statement
  • Revenues – March 2019
  • Revenues – March 2020 to date
  • Balance Sheet (as of application date)
  • Completed Business W-9 Form

Additionally, you must provide:

  • Date of business establishment
  • Description of Economic Impact Loss (loss of sales or revenue)
  • Estimated loss of revenues March 15, 2020 – April 15, 2020
  • Description of how funds will be utilized to maintain operations or reopen after the disaster

How is eligibility determined:

  • Must be experiencing disruption due to the COVID-19 pandemic; and
  • Be a Targeted Small Business or have an application in process by April 10, 2020 to become certified as a Targeted Small business in accordance with Chapter 52 of Iowa Code.; and
  • Be a single owner business with no employees, or a corporation with only one owner and no employees; and
  • Verify that Targeted Small Business income is the primary source of income for the business owner

To be eligible for TSB Certification, businesses must be:

  • Located in the state of Iowa; and
  • Operating for a profit; and
  • Make less than $4 million in gross income, computed as an average of the preceding three fiscal years; and
  • Majority owned (51% or more), operated and managed by a female, individual with minority status, service disabled veteran or individual with a disability

The funds may not be used to pay debts incurred prior to March 17, 2020.

Link for the full press release.