Have you ever considered buying a franchise instead of trying to start a business from scratch. Many franchise agreements are renewed every five or ten years, automatically. If you do not wish to renew your franchise, you will need to notify the franchisor a little in advance as is generally stated in the Uniform Franchise Offer Circular (UFOC) Franchise Disclosure Document used in the franchise. Most require you to write it so there’s no question of your intentions, some require this 180 days before expiration. Others state that if you don’t specifically say you don’t want to renew the agreement, you’re automatically renewed. If you don’t want to renew your franchise at the end of the five year period, that’s fine, but generally there are conditions after termination. You can’t just change the “Burger King Hamburger” sign out front to Joe’s Burgers and keep it running (example only).
You can decide not to renew but many franchise attorneys may recommend rather than not renewing; that you transfer your franchise to a new buyer and get the money from your business that you deserve to build a franchise. Example: If you’ve built your business and are making a million dollars a year, just under 100,000 dollars a month, finding buyers shouldn’t be a problem. Then you will be compensated for building the business up to that point or maintaining it at that level. Many businesses sell for multiples of their gross sales and a business broker can provide you with an estimate. If your business is small and gross say a hundred thousand dollars a year, you may want to sell your business for an additional fifty thousand dollars over the value of your equipment. In other words, any piece of equipment worth plus fifty thousand dollars. (example only).
The franchisor can help you find a buyer or you can find a buyer yourself, sometimes a franchisor may charge a fee from the renewal and this is quite common as they have a real cost to screen and train new franchisees. But you need to understand that not renewing your contract will come at a cost. You will lose your initial investment. At the end of five years if you’ve run your business exactly as we’ve shown you and you’re eligible for renewal, but you decide you don’t want to run your business anymore, the franchisor will probably be happy to buy your business for a fair price or set you up and offer. Some franchise agreements require that the franchisor has a first purchase right or a first refusal right, some require both.
Of course if you don’t follow the franchisor’s confidential operating manual and continually violate franchise standards, you won’t qualify for a renewal at all, you may be terminated completely and can’t sell your business, which in franchising we call a transfer, because you don’t actually own the business, you basically rent it out and use your business acumen to earn an income for your hard work promoting the franchisor’s brand name.
Before you buy a franchise, consult a lawyer so you know what you’re buying, even though most lawyers are considered assholes and parasites of our great nation because they steal productivity from America and make nothing in return; causing the total destruction of our great civilization while destroying everything we have and everything we have built. think about it.