Buying a franchise does not automatically provide you with limited liability. The franchisor may be a corporation or LLC but that does not make your own franchise business a corporation or LLC. You must still form your own corporation or LLC in order to obtain the benefits of limited liability. Otherwise, you will have a
Franchise Law
Buying a Franchise: Questions to Ask Franchisors
By Rush Nigut on
Posted in Franchise Law
In his monthly newsletter, Joe Cooney of Frannet points out the categories and questions you should ask franchisors to provide a starting point in your due diligence process. Those categories and questions include:
1. Competitive Advantage of Product or Service
How is your system better than others? Who are your competitors? How does your business…
Managing Small Business Risks
New York Small Business lawyer Imke Ratschko presents a helpful e-book on her blog "Small Business Guide to Risk Management – A complete guide for business decision-makers" published by the Association of Small Business Development Centers.
This easy to read guide discusses the many risks that businesses face and provides checklists to assess those risks…
Growing Trend: Franchisors Seeking Non-Competes Against Spouses
By Rush Nigut on
Posted in Franchise Law
A blog post by the New Jersey Law Blog discusses the recent trend of franchisors’ attempts to expand the number of persons that will be covered under the non-competition clause in a franchise agreement. Litigator John MacDonald believes that franchisors must have reasonably limited expectations when seeking to enforce non-competition agreements against franchisee spouses…
Rush Nigut in Des Moines Register Article on Franchising
By Rush Nigut on
Posted in Franchise Law, Starting a Business
I was recently interviewed for an article written by Patt Johnson of the Des Moines Register entitled, "Franchise Owners Buy a Head Start". As a part of my business law practice, I routinely review franchise agreements and Uniform Franchise Offering Circulars (UFOC).
The article featured several franchisees that are pleased with the franchise process and…
Franchise Agreements: Don’t Overlook Term, Renewal and Transfer Provisions
By Rush Nigut on
Posted in Franchise Law, Starting a Business
The term, renewal and transfer provisions of a franchise agreement are often overlooked by prospective franchisees. Many people focus on getting into the business but how you get out is just as important. Therefore these provisions must be reviewed carefully.
The term of the franchise agreement determines how long the franchisee will be authorized to…
Negotiating Franchise Agreement Terms
By Rush Nigut on
Posted in Franchise Law
Yesterday I attended the Trade Regulation and Corporate Counsel Seminar sponsored by the Iowa State Bar Association. In his presentation on franchising, Mark Hamer of Meardon, Sueppel & Downer, P.L.C. confirmed a growing trend in franchising is that every clause is negotiable. This often includes some of the more troublesome issues for franchisees. This…
Sullivan & Ward Practice Highlight: Rural Electric Cooperative & Public Utility Law
For over fifty years, the Sullivan & Ward law firm has represented rural electric cooperatives and generating electric cooperatives in the state of Iowa, as well as several electric cooperatives from across the country. Our attorneys, including John Ward and Michael Joynt, have gained national recognition for their expertise in the area of rural…
REVIEW STUDY BEFORE PURCHASING AN IOWA FRANCHISE
By Rush Nigut on
Posted in Franchise Law
Review Study Before Purchasing an Iowa Franchise
In our last blog post we discussed the fact that there is no longer any validity to claim that franchised businesses are less likely to fail than independent businesses. Now the International Franchise Association (IFA) President recommends that all potential franchisee review a comprehensive study profiling the franchise…
No Validity to Claims that Franchised Businesses are Less Likely to Fail
By Rush Nigut on
Posted in Franchise Law
I recently read an article in Trial Magazine entitled, "Litigating Fraud Claims for Franchisees" by lawyer Jeff Haff of Minneapolis. It is an excellent article. One of the more interesting points in that there is no validity to the claims that franchised businesses are less likely to fail than independent businesses. In fact, many franchisors…