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Virginia Business Law On Franchising
business.gov, Mar 09, 2006use the franchise name and trademark
receive training and management assistance from the franchiser
use the franchise's expertise in marketing, advertising, facility design, layouts, displays, and fixtures, and
do business in an area protected from other competing franchisees.
In some cases, the franchisee may negotiate to have the franchiser help obtain building permits, purchase or lease equipment, signs and supplies, and construct or remodel the business premises.
For those looking to purchase an existing business, buying into a franchise can be an attractive option. While franchisees have the highest survival rate of any type of business startup, the operational and financial restrictions on franchisees are greater as well. Franchise law is a complicated and highly specialized area, and it is essential to enlist the services of a qualified attorney throughout the entire process.
PrePurchase Detective Work: In addition to the routine investigation that should be conducted prior to any business purchase, potential franchise buyers should be able to contact other franchisees before deciding to invest. They should also obtain a uniform offering circular containing vital details about the franchise's legal, financial, and personnel history before signing a contract.
Before signing, franchisees should make sure they will have the right to:
Possible Pitfalls: The contract between the two parties usually benefits the franchiser far more than the franchisee. The franchisee is generally subject to meeting sales quotas and is required to purchase equipment, supplies, and inventory exclusively from the franchiser. The franchiser often has the right to terminate the franchise if it fails to operate the business according to the agreement, becomes delinquent on royalties, or violates other contract specifications.