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People's Law Guide


Things to Consider Before Purchasing a Franchise

by Stephen M. Feidelman, Esq.



You should consider the following issues before committing to any purchase:

    * Are you willing to work within the limits and operating structure of the franchise system?

    * Is the product or service to be offered something which you enjoy dealing with?

    * Have you evaluated the market for that product or service?

    * Have you read the franchise disclosure document and resolved any questions which have been raised?

    * Can you arrange for sufficient working capital to offset periods of negative cash flow while the business becomes established?

    * Do you have a business exit strategy and do the franchise agreement terms conflict with it?

    * Have you learned as much as you can from existing and past franchisees about the system under consideration?

    * Have you negotiated the most favorable terms for acquiring or leasing a commercial business premises?

    * Have you sought independent legal and financial advice about the business relationship you are about to enter into?

    * Have you explored the formation of a business entity to help avoid owners’ liability for third party claims against the business?



Stephen M. Feidelman maintains a general civil law practice in Hollywood, Florida, with a core concentration on franchise and dealership representation and allied business law issues. He has attained a Martindale-Hubbell Peer Review rating of AV®, which depicts that a lawyer is recognized for the highest levels of skill and integrity; has served on the Executive Council of The Florida Bar Business Law Section; chaired The Florida Bar's Antitrust, Franchise and Trade Regulation Law Committee; been a faculty participant in numerous seminars related to franchise and business opportunity legal issues; contributed to Florida Bar committee consumer education pamphlets and seminar course materials; and been a guest lecturer on franchise law issues at the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University.

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