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Riley McCullough, Unsplash

In the summer of 2021, the NCAA implemented a groundbreaking policy. For the first time in the tenure of college athletics, student-athletes were permitted to earn income from their name, image, and likeness. This process of college athletes earning income has become commonly known as “NIL.” While many believed this rule was the change necessary to balance the inequities between student-athletes and the coaches and universities, NIL has had other effects and has drastically changed the landscape of college athletics.

NIL was intended to provide athletes with an opportunity to monetize their personal brands and earn income throughout college. To earn NIL funds, student-athletes can engage in various business-like activities, including social media influencing, public speaking, autograph sessions, training camps, lessons, or other promotional activities and appearances. One key aspect of NIL is that student-athletes must actively participate in one of these activities – a student’s NIL earnings cannot simply be passive income. Further, NIL is not to be used as a recruiting tool despite the relationship between these opportunities and certain colleges or universities. This means that coaches and universities are prohibited from offering NIL packages to new recruits. While they can highlight NIL opportunities and endorsements that current athletes have, outright offering a recruit or transfer student a sum of money to attend that university is disallowed and inconsistent with the very purpose of NIL. Regardless of the regulations in place, universities and athletic programs are increasingly leveraging NIL to attract high school recruits and transfer students. This practice raises ethical questions about the true purpose and function of NIL and whether it undermines the integrity of amateurism in college athletics.

In today’s world of college athletics, incoming high school students and transfer students have NIL valuations and payments dangled in front of them before committing to a university and without having participated in any sort of required business-like activity. For example, in June 2024, while welcoming football recruits to campus, the University of Texas lined the entryway to their athletic facilities with a “fleet” of Lamborghinis from a local dealership and university NIL partner. While this elaborate show of NIL wealth may not have been an explicit offer to recruits, it almost certainly straddles the line of an impermissible use of NIL in recruiting. Another example of NIL in the recruiting process comes from a recent Sports Illustrated article. It has been reported that the University of Michigan is offering a five-star football recruit upwards of $5 million to attend the university. The complete lack of oversight by governing bodies has allowed universities to use NIL as a means of enticing student-athletes with large amounts of money without ever performing a public appearance, autograph signing, etc. – and in many scenarios, long before the recruit has developed a “brand” of their own, the intended profit driver behind NIL.

In addition to NIL being used outside of its intended means, it has also radically shifted the power dynamic between coaches and student-athletes. Most recently, in September 2024, two football players from UNLV decided to sit out the remainder of the college football season after leading their team to a 3-0 start. According to the University, the players made certain demands of the University’s NIL collective. Conversely, the players alleged that the University failed to follow through on NIL commitments it made (likely impermissibly under NIL regulations) to the athletes when they were recruited to the University. This type of situation is exactly what some critics of NIL feared—universities could sell snake oil to recruits by telling them they could get rich by playing there, or athletes could make unreasonable demands on their school’s NIL funds without participating in the necessary activities. Regardless of which account is true, NIL has created a dangerous dynamic of “pay for play,” something the NCAA had intended to avoid.

One way to address this issue is for universities and collectives to establish clear, enforceable written contracts with athletes. These contracts should outline specific NIL activities required of the athlete and define payment structures that ensure both parties meet their obligations. Such agreements can reduce disputes by eliminating ambiguity and ensuring that athletes understand their commitments. Additionally, these contracts should include provisions that encourage athletes to complete at least the current season before redshirting or transferring to another program, especially in team-centric sports like football. By implementing these safeguards, universities can maintain team cohesion and ensure that NIL agreements uphold the broader goals of fairness and integrity in college athletics.

NIL funds have truly transformed college athletics into the Wild West—a perplexing mix of ethical questions and legal gray areas. The NCAA has rules in place but is yet to strictly enforce them. Moving forward, it is imperative that the NCAA, along with universities and collectives, find ways to balance opportunities for athletes to benefit from their name, image, and likeness while preserving the integrity and spirit of college athletics. Written contracts could serve as a critical tool in achieving this balance, offering transparency and accountability in an increasingly complex system.

* This post is a guest post written by our associate attorney, Luke Zielinski. Luke and I share a love of sports and entertainment law issues. At Brick Gentry, Luke offers services in areas including corporate and general business transactions, mergers and acquisitions, and real estate and municipal matters. His dedication and passion for his work allows him to help guide clients and create innovative solutions to intricate legal issues.  

As you leave Slab City (a 'free community' east of the Salton Sea) you see this painted, now defunct, guard shack. Colorful and funny.
Donald Giannatti, Unsplash

I recently took a call from someone eager to buy a restaurant franchise.

They were excited, optimistic, and ready to take the plunge. The idea of owning their own business, working for themselves, and controlling their destiny had them fired up. They had done some research, run the numbers, and figured they were ready to roll. But there was one glaring issue.

They had zero restaurant experience.

Now, I could have leaned into their enthusiasm, gone along, and reassured them that everything would work out. That would have been easy. It would have made them feel good. And honestly, it would have made me feel good too and allowed me to earn a nice fee. After all, who does not want to be the person who helps someone chase their dream?

But that is not my job.

My job is often to help people avoid making significant mistakes. Especially when those mistakes could cost them hundreds of thousands of dollars and years of their life.

So, I did what I always do in these situations. I told them the truth.

The Reality of Owning a Restaurant Franchise

I shared what I have learned from years of working with clients in the restaurant industry. I talked about the challenges with employees—constant turnover, the difficulty of finding good managers, and the endless HR headaches. I explained the high failure rates in the restaurant business, even for franchise owners. And I was honest about the time-consuming nature of managing such a business. Owning a restaurant is not a part-time gig or a side hustle. It is a lifestyle. A demanding, often overwhelming lifestyle.

And I told them something they probably were not expecting to hear: without any prior restaurant experience, they were potentially walking into a firestorm.

The numbers might look good on paper. The franchisor might be promising the world. But the reality on the ground is very different. It is tough. It is risky. And for someone without a background in restaurants, it can be downright brutal.

Why Tough Conversations Matter

This is not an easy conversation to have. When someone calls me, they are often looking for validation. They want me to confirm what they already believe—that their plan is solid, their dream is achievable, and they are ready to move forward.

But here is the thing: my job is not to validate someone’s feelings. My job is to protect their future.

That means I often have to tell people what they need to hear, not what they want to hear.

And sometimes, they do not want to hear it.

But tough conversations like these can save people from making life-altering mistakes. They can save marriages, retirement accounts, and years of regret. Because the truth—while it might sting in the moment—is far better than a sugar-coated lie that leads someone straight into disaster. Even if it means I lose a fee.

The Role of a Lawyer as a Guide

When you work with a franchise or business lawyer, you should want to hire someone who does more than just dot the i’s and cross the t’s on your legal documents. You are hiring someone to guide you through some of the biggest decisions of your life.

For me, that means using my experience—not just as a franchise and business lawyer, but as someone who has worked with countless clients in industries like restaurants—to provide real, honest advice. It means looking beyond the shiny marketing materials and digging into the hard truths. It means being the person who raises their hand and says, “Have you really thought this through?”

In this particular call, the prospective client thanked me giving them a lot to think about. They admitted they had not considered many of the challenges I mentioned. And while they were still interested in pursuing the franchise, they walked away from the conversation with a clearer understanding of what was ahead.

That is the goal.

It is not about crushing dreams. It is about making sure those dreams are rooted in reality.

Why Honest Advice is a Must

Too many people surround themselves with yes-men. They chase ideas without ever stopping to question the risks. And when things go south, they are left wondering why no one warned them.

But here is the thing: the warning signs are almost always there. You just need someone with the courage to point them out.

That is where I come in.

When you hire me, you are not hiring someone to tell you what you want to hear. You are hiring someone to tell you what you need to hear. Even if it is uncomfortable. Even if it makes you pause. Because at the end of the day, it is far better to have a tough conversation upfront than to deal with the fallout of a bad decision down the road.

The Bottom Line

The truth is not always easy to hear. But it is always worth it.

That is my promise.

If you are ready for someone who will put honesty above your feelings, let’s talk. Because sometimes, what you need most is someone who will tell you the hard truth—and then help you figure out where to go from there.

That is what I do.

Berkeley Communications phone call
Berkeley Communications, Unsplash

In an era of increasing sophistication in scams, fraudsters have found a new tactic: exploiting real business names and lawyer identities, likely scraped from Secretary of State websites or public records, to bolster their credibility. This scheme not only tarnishes reputations but also endangers unsuspecting victims who may unknowingly engage in fraudulent dealings.

I recently uncovered such a scam involving one of my clients’ business names. Fraudsters are falsely claiming to represent this business and, disturbingly, falsely naming me as their attorney. Their ruse? Pretending to be brokers searching for rental properties for high-profile events, such as PGA tournaments, including an upcoming event in Puerto Vallarta.

This scheme is particularly alarming because it blends legitimate-sounding business dealings with fabricated documents and legal representation. By using the names of real businesses and lawyers, scammers make their operations appear credible and professional, luring in their victims with carefully constructed lies.

How to Protect Yourself

Here are a few steps you can take to stay vigilant:

  1. Verify Credentials: Always independently verify the identity of businesses, brokers, and attorneys involved in a transaction. Cross-check their contact details with official websites or directories. In the instances of the recent scammers using my client’s business name, a couple of the people contacted avoiding being a victim by calling our office. We were able to verify we were not involved and that it was a scam.
  2. Be Wary of Unsolicited Offers: If you are approached with a seemingly lucrative or urgent opportunity, take the time to investigate its legitimacy thoroughly. Think: would a legtimate business contact me in this manner? If it feels wrong, it probably is wrong.
  3. Scrutinize Documentation: Look for inconsistencies, odd wording, or formatting in contracts or correspondence. A professional review can often reveal red flags.
  4. Report Suspicious Activity: If you suspect fraud, notify the business or lawyer whose name is being misused and report the scam to local authorities or consumer protection agencies. It is very hard to catch these scammers because most of them reside outside the country, but it is good to provide information to authorities so they can get information out about the scams.

A Personal Note

This particular incident was not on my bingo card for the year. Seeing my name falsely attached to such a scam is unsettling, but it reinforces the importance of diligence and transparency. By staying informed and cautious, we can collectively minimize the damage caused by these bad actors.

Remember, if something feels off, trust your instincts. Stay vigilant!

Feel free to share this post to raise awareness and help others protect themselves.

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Austin Chan, Unsplash

A client recently asked for my thoughts on a new franchise they are considering.

When it comes to franchising, there is a unique allure to being one of the first. You imagine the chance to “get in on the ground floor,” to ride the wave of a promising new concept. But investing in a new franchise also comes with risks—a lack of history, unproven systems, and uncertainty about long-term potential.

Before diving in, you need to evaluate the opportunity through a clear, strategic lens. Here are five key factors I recommend focusing on.

1. Market Demand

The first question is the most critical: Is there a real, unmet demand for the product or service, or will you need to build the market from scratch?

Established franchises often succeed because they tap into a proven demand. A new franchise, however, can be a gamble. Ask yourself: Does the franchise solve a problem people already have? Are customers searching for this type of offering, or is it so novel that you will need to educate them first?

For example, a niche fitness concept might thrive in certain demographics but struggle in others. Research your local market. Talk to potential customers. Analyze whether the product or service fills a void in your community—or if it risks becoming a “solution looking for a problem.”

If the demand exists, you are halfway there. If it does not, prepare for an uphill battle.

2. Profitability

A franchise’s potential profitability is another vital consideration. This is where many new franchisees fall into the trap of optimism.

Even for new franchises, the franchisor should have piloted their concept with multiple successful locations. Are they profitable? If so, how long did it take to break even?

Do not just take the franchisor’s word for it—dig deeper. Review the Franchise Disclosure Document (FDD) to see if it includes an Item 19 Financial Performance Representation. If the franchisor has chosen not to provide financial projections, proceed with caution.

A new franchise may promise profitability, but without proof, it is just speculation.

3. Support and Training

Even the best franchise concept can fail without proper support and training.

A strong franchisor knows the importance of equipping their franchisees with the tools for success. For new franchises, the system may not yet be as polished as that of an established brand. Your job is to assess whether the existing training and support are sufficient—or if you will be left to figure things out on your own.

Here are some questions to ask:

  • What does the initial training program include?
  • Is there ongoing support, such as field visits or regular check-ins?
  • Are there clear processes for marketing, operations, and customer service?

The franchisor’s willingness to invest in your success is often the best indicator of their long-term commitment. If they seem disorganized or dismissive, that is a red flag.

4. The Franchise Disclosure Document (FDD)

The FDD is your roadmap to understanding the franchise opportunity. A thorough, transparent FDD signals a franchisor that values trust and clarity.

Review it carefully, focusing on key sections such as:

  • Initial fees and ongoing royalties
  • Obligations of both the franchisor and franchisee
  • Restrictions on suppliers or operations
  • Termination and renewal terms

Are the terms fair and reasonable? Is there room for negotiation?

Hire a franchise attorney. The FDD is long and complicated, but missing a critical detail could cost you in the future.

5. Franchisee Experience

Even if the franchise is new, there should be a few early adopters. Their experiences can offer invaluable insight.

Request a list of current franchisees from the franchisor, and make it a priority to reach out to them. Ask about their experience with:

  • The onboarding process
  • Day-to-day operations
  • Profitability and timeline to break even
  • The quality of franchisor support

Sometimes these conversations reveal what the marketing materials do not. Pay attention to their tone and willingness to share details—if they seem reluctant or dissatisfied, it may be a warning sign.

Final Thoughts

Investing in a new franchise can be a rewarding journey, but it is not for the faint of heart. The lack of an established track record means you are relying on your due diligence to uncover potential risks and rewards.

Take your time. Ask tough questions. And remember, you have more power than you think. Franchisors need early adopters, and this gives you leverage to negotiate terms that protect your investment.

The best franchise decisions are not made on excitement alone—they are made with strategy, foresight, and a willingness to walk away if the fit is not right.

Do your homework.

And when the right opportunity comes along, you will know.

EXIT
Dongki Koh, Unsplash

Exiting a failing franchise is not easy.

When a franchise struggles to deliver expected returns, franchisees often wonder if they can negotiate an exit from their ongoing obligations, especially the requirement to continue paying royalties. Franchise agreements are complex, one-sided documents that make severing ties without repercussions challenging. Many franchisees quickly discover that the franchisor holds considerable leverage, with limited contractual obligations to provide ongoing support. Breaking free from such an arrangement requires more than a good strategy. It requires collaboration, careful documentation, and a willingness to understand the franchisor’s perspective.

Franchise Agreements: A Reality Check

Most franchise agreements are designed to protect the franchisor. These contracts are structured to preserve brand integrity, ensure a steady revenue stream through royalties, and give the franchisor control over the brand experience. For franchisees, this often means accepting a framework that prioritizes consistency over individual flexibility. Unlike independent businesses, franchisees are bound by brand standards, approved suppliers, and sometimes even local marketing mandates. Some franchisees thrive within these guidelines, while others struggle to find profitability despite their best efforts.

The structure of these agreements compounds the challenges of exiting. Ongoing royalty payments—typically a percentage of gross sales—remain a contractual obligation even when a franchise underperforms. Franchisors rely on these royalties as a primary revenue stream and rarely waive them lightly. Franchisees hoping to escape royalty payments must either work collaboratively with the franchisor or prepare for the daunting possibility of a costly legal battle.

Why Collaboration Is Key

Franchisors generally do not want to see franchisees fail. A failing franchise reflects poorly on the brand and discourages potential investors. Approaching the franchisor with a collaborative mindset is critical. Franchisees who present themselves as partners in resolving the issue are more likely to engage in productive discussions. Suggesting potential solutions, such as transferring the franchise to a new owner, temporarily reducing royalty rates, or exploring a reduced lump sum payment to exit, can open a path that satisfies both parties.

The importance of a cooperative approach cannot be overstated. Franchise litigation is a costly and lengthy process. Franchisors are often prepared to handle legal disputes with internal legal teams. Franchisees, however, may find themselves at a disadvantage due to the time and expense involved. Moreover, courts often enforce franchise agreements as written, giving the franchisor a significant advantage. Rather than choosing an adversarial route, franchisees are often better served by engaging in open, solution-oriented dialogue.

Key Considerations Before Approaching the Franchisor

Before initiating discussions with the franchisor, franchisees should evaluate several key considerations that can influence their negotiating position. These considerations clarify what is realistic and achievable, allowing the franchisee to approach the conversation with preparation and insight.

  1. Assess the Potential for Sale
    The first option is determining whether the franchise could be sold to another franchisee or new investor. Franchisors may support a sale if it presents a viable alternative to terminating the franchise agreement. Franchisees should evaluate the market for potential buyers, prepare financial statements reflecting the actual performance, and determine whether a sale could offset some losses. If a sale is possible, it may allow the franchisee to transition out of the business without further financial entanglements.
  2. Document Financial Losses
    Franchisors are more receptive to negotiating exit terms when they understand the full extent of a franchisee’s losses. Providing well-documented records demonstrating sustained financial challenges over a reasonable period can help build a case for relief. Revenue reports, expense statements, and financial records that highlight ongoing challenges can convey that underperformance is due to market conditions or structural issues rather than poor management.
  3. Outline Attempts to Improve Performance
    Franchisors expect evidence that franchisees have made good-faith efforts to improve their bottom line. Document any initiatives to boost sales or reduce expenses, such as marketing efforts, operational changes, or consultations with franchisor-provided support. Showing multiple strategies have been tried but failed adds weight to the request for relief or exit.
  4. Consider Financial Impact on the Franchisor
    Franchisees should recognize that royalties are part of the franchisor’s revenue structure. These payments may feel burdensome, but from the franchisor’s perspective, they are not optional. Franchisees proposing a win-win scenario, such as a temporary royalty reduction or a lump sum settlement payment, may find the franchisor more open to negotiation. By empathizing with the franchisor’s financial considerations, franchisees can demonstrate a cooperative spirit and increase the likelihood of a favorable solution.

The Path Forward

Exiting a poor-performing franchise is neither simple nor guaranteed. It requires franchisees to approach the situation with patience, preparedness, and a clear understanding of the franchisor’s perspective. While the path is challenging, those who adopt a collaborative mindset and come armed with documentation, insights, and realistic proposals stand a better chance of negotiating favorable terms.

A collaborative approach benefits both the franchisee and the franchisor. Franchisees gain an opportunity to exit gracefully, while franchisors preserve brand integrity and avoid the costs and reputational risks of litigation. When franchisees see themselves as partners with the franchisor in resolving the situation, the process becomes more manageable and far less daunting.

Preparation and cooperation make all the difference.

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Oxana Melis, Unsplash

Continuing royalty payments after termination are often an overlooked financial trap in a franchise agreement.

When you sign the deal, you agree to pay franchise royalties as part of the agreement. But what most franchisees do not realize is that these payments can continue even after termination of the agreement. This leaves you financially exposed long after you have cut ties with the franchisor.

You need to review the agreement with precision. Many contracts include clauses that force you to keep paying even if the franchise ends early. If the termination is due to a breach or if you decide to leave the franchise early, the franchisor can still demand royalties. You could be paying without receiving anything in return.

But here is the key: these terms are negotiable. Do not just accept them. Work with franchise legal counsel to eliminate or limit these ongoing payments. It may not always be possible, but reducing them can save you from significant loss.

Take control of your financial future. Negotiate these post-termination royalty clauses if possible.

Do not let these royalties haunt you.

A puffin starts to fly after running on water.
Mark König, Unsplash

Phishing tactics are growing, and “impersonation” is their sharpest tool.

In recent months, it seems more businesses are reporting phishing attempts targeting their operations, with bad actors posing as trusted contacts or clients. The result? Devastating losses in both data and finances. Impersonation has become the leading method because it works by exploiting human trust—attackers mimic familiar names, sending emails or messages that appear legitimate. This tactic lures victims into sharing sensitive information or even wiring funds to fraudulent accounts.

What makes phishing particularly dangerous today is the sophistication of these schemes. Gone are the days of broken grammar or clearly suspicious email addresses. Now, scammers mimic trusted executives, partners, and suppliers with chilling accuracy. In one example, a business thought they were fulfilling a routine request from a long-standing supplier, only to realize later they had wired funds to a scammer. In another example, a scammer acted like a client of a law firm where the fake client claimed a settlement occurred “just because the lawyer took the case.” The scammer sent a fraudulent check to the law firm, aiming for the lawyer to deposit it into the trust account and disburse the client’s share of the settlement before realizing the check was fake.

So, what can be done to prevent this? First, invest in employee training. Most phishing scams rely on human error—someone clicking on a malicious link or replying to a fake email. Teaching your team to spot phishing signs, such as inconsistencies in email addresses or unusual requests, can be a game changer. Additionally, using two-factor authentication can provide an extra layer of security, ensuring even stolen credentials cannot easily be exploited. Finally, it is crucial to have a strong incident response plan in place to limit damage if a scam slips through.

Impersonation is on the rise and will likely continue to be a prolific method used in phishing attacks. It is vital to remain vigilant, stay educated, and arm your business with the best defenses against phishing scams because preparation is your strongest defense.

Your business depends on awareness.

We’ve heard of this beautiful beach through the grapevine and decided to check it out. It exceeded all expectations.
Tobias Tullius, Unsplash

Risk-taking. It is the secret sauce behind many successful young entrepreneurs.

When you are young, you have a unique advantage. You have the time to recover from mistakes. Mistakes become learning experiences, not setbacks that define your career. This mindset allows young entrepreneurs to take risks that older, more established business people might shy away from, even if they know it could lead to even greater success.

The Burden of Success

Older individuals often carry the weight of their existing success. Think about Iowa football coach Kirk Ferentz. Ferentz has a track record of success that is beyond what most coaches can only dream. He is on track to become the all-time winningest coach in the Big Ten. However, despite this success, he struggles in the biggest games against top-ranked teams. Why? Because his conservative approach does not play well against the elite competition. It is not that his team lacks talent or that he lacks knowledge. It is that his success has become a double-edged sword—making him wary of taking the calculated risks needed to level up. Just like his decision not to go for it on 4th and less than a yard at midfield during the Ohio State game this past weekend.

Young entrepreneurs, on the other hand, do not have the burden of decades of success holding them back. They have a natural inclination to explore, learn, and take risks. That does not mean they throw caution to the wind. Successful risk-taking is about making informed decisions based on thorough research and planning. It is about calculating the downside and having the grit to pursue an opportunity despite the risks.

Calculated Risks: A Real-World Example

One of my top clients exemplifies this mindset. He constantly assesses opportunities, follows the lead of incredibly successful individuals, and does not shy away from taking calculated risks. His approach has led to amazing success, and he is not even 30 years old yet! He did not stumble into success; he embraced risk, made informed decisions, and took action when others hesitated.

The Courage to Follow a Dream

I have also seen this willingness to risk up close. A former law partner of mine walked away from a well-paid law practice with us to follow his dream of building businesses. I am so proud that he is already finding terrific success, and I could not be happier for him. Some people questioned his move. After all, he had a great job, one that many lawyers spend their entire careers trying to achieve. But he knew that if he did not take the chance now, he might never do it. I admire him greatly for that decision. It was not easy, and it certainly was not the safest choice, but it was the right one for him. By taking that step, he opened the door to the kind of success that only comes when you are willing to embrace risk and step into the unknown.

Learning from the Young and Bold

This is the kind of risk-taking from which older, successful individuals can learn. Success can often create a comfort zone that discourages further exploration. The fear of losing what one has built becomes greater than the desire to achieve something more. But just like Coach Ferentz, sticking to a conservative game plan can limit potential. The real threat is not risk; it is the failure to take bold action.

The Key Takeaway: Risk Wisely

So, what is the takeaway? Taking risks does not mean being reckless. It is about knowing when to push the envelope based on solid information and a clear understanding of the possible outcomes. It is about knowing when to lean on advisors. It is about assessing the landscape, much like my client does, and making the call to go for it when the odds are in your favor.

Playing to Win

In business, just as in sports, the winners are often the ones who take smart, calculated risks. They learn from mistakes, adapt, and keep pushing forward. The willingness to risk is not just a young person’s game; it is a mindset. It is about having the courage to step out of your comfort zone and play to win, not just to avoid losing.

Young entrepreneurs have this courage because they know they can recover and learn from their mistakes. Older business people can have it too. It just requires breaking free from the trap of past success and embracing the possibilities that come with calculated risk-taking.

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Kenny Eliason, Unsplash

Sales numbers are seductive.

I see posts all the time on X and in articles about franchise operations bragging, “We did $10 million in sales this year!” But here’s the truth: sales numbers alone are smoke and mirrors. The key metric everyone overlooks? Profit.

Sales ≠ Success. High sales are impressive, but they don’t reveal the full story. You could have a million-dollar franchise, but if the expenses eat up $950,000, you are only left with $50,000 in profit. Suddenly, that “success” does not look so shiny.

Profit Is What You Keep. Profit is what matters. It’s the money that lands in your pocket after all the fees, royalties, payroll, and operational costs. Without a solid profit, high sales are just a vanity metric.

Franchisors Won’t Tell You This. Financial representations in franchise disclosure documents focus heavily on sales figures, often leaving out details about profitability. It is up to you to dig deeper. Ask existing franchisees: What are their real take-home earnings? What unexpected costs have eaten into their margins?

Do Your Homework. Do not be blinded by flashy sales stats. When examining a franchise, always focus on the franchisor support and how much profit you can reasonably expect. It’s the only way to gauge the true potential of your investment.

Next time you see a post boasting millions in sales, remember: the top line is impressive, but the bottom line is what you live on. Profit is the real measure of success. Focus on it.

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Flow Clark, Unsplash

You’re busy.

Running a business means managing a million things at once, and legal paperwork often takes a backseat. But if your operating agreement is outdated, it could cost you more than you think.

First, Avoid Costly Disputes

An up-to-date LLC operating agreement keeps everyone on the same page. It outlines each owner’s roles, how profits are split, and how decisions get made. Without this clarity, misunderstandings can spiral into full-blown disputes, leading to wasted time, money, and broken partnerships. A simple update now can prevent a messy court battle later. Here is a prime example: An owner left the company, but the exit was never properly documented. Years later, a dispute arose between the remaining partners. Not only did they have their own disagreement to resolve, but the situation was further complicated by the fact that the previous owner’s departure was never officially recorded. This oversight added layers of complexity to an already messy conflict.

Capture New Opportunities

Your business evolves, and your operating agreement should too. As new commercial opportunities arise, a flexible and current agreement may be helpful as you seize them. Whether it’s investing in a new venture or dissolving a partnership, having clear provisions in place can be the key to seizing those moments.

Minimize Risks

Changes in your business structure, ownership, or market can create new risks. Your operating agreement needs to adapt accordingly. Adding clauses on competition, confidential business information or other protocols, for example, can protect your business as it grows and takes on new challenges.

Project Professionalism

Clients and investors notice when your business is buttoned up. An updated operating agreement signals that you’re professional and compliant. It’s a small detail, but it can make a big difference in building trust.

Need help updating yours? Let us know if we can help.