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Challenges and opportunities for prospective franchise owners

Smart Texas business principals and entrepreneurs are always on the lookout for new opportunities. That is especially true for owners, investors and other commercial participants in Houston and surrounding areas. We note in a recent Stephenson Fournier blog post that “the Houston area has long been a magnet for business growth.”

Successful enterprises, of course, assume many forms. Today’s post focuses specifically on franchises, which are often attractive choices for aspiring business owners.

The Franchise Business Model: An Interesting Opportunity

There are reportedly well more than half a million franchise operations in the United States. One in-depth legal overview of franchise businesses reports that they collectively employ several million people and generate many billions of dollars in revenue annually. While there are no guarantees of success, here are some reasons why legions of franchisees are happy business owners:

  • Notable flexibility allowing for out-of-the-gate expansion
  • Reduced costs required to get started and maintain solvency while gaining traction
  • Opportunity to benefit from an established franchisor’s successful business plan, training program and advertising
  • Motivation for mid-level managers to succeed and grow the business

That bulleted list is just a brief summary of a few upsides that are sometimes available to a franchisee. There are many additional attractions as well, but those must be acknowledged alongside risks and challenges that also exist.

Why a franchisee can benefit from proven legal counsel

We underscore on our website that “buying or opening a franchise can be a daunting process.”

Indeed, the hurdles can be many. Experienced commercial law attorneys can help with these key matters and additional concerns:

  • Initial research and due diligence
  • FDD review and analysis; negotiation of Franchise Agreement
  • Securing of various approvals and permits
  • Loan negotiation and review
  • Legal review and negotiation of property acquisition or lease documents
  • Formation, structure and documentation of franchisee entity

Many Texas franchisees operate highly successful – and often expanding – businesses. They are helped by knowing that they conducted full due diligence and were optimally safeguarded against risk from the outset.

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