Buying any franchise is a significant commitment. Purchasing one with your partner requires you to make even more important long-term commitments that you may not immediately grasp. We’re not just talking about matters related to finance here. Make sure you’re ready for everything co-owning a franchise entails by checking out the information included in this article.
1. You Will Need a Franchise Attorney
People can change significantly within a short amount of time. Mere months ago, you might have been convinced that a steady office job is your calling. Now, you cannot get the thought of owning a successful franchise out of your head. Even if you are committed to making your franchise successful, your partner may not have the same stomach for that. After a few rough months, they may be eager to cut their losses and try something new. With your co-owner bowing out, you may suddenly find yourself in a tough spot financially.
Hopefully, you hired a franchise attorney before you finalized the franchise purchase. Your franchise attorney can draw up documents to protect you financially if your partner wants to pull their money out. They can create documents outlining how the franchise will receive financing in the event of a divorce or separation. A franchise attorney’s services are helpful, not just for smoothing things out with your former partner. They can also help from the start by reviewing the terms of your purchase. Your attorney will also ensure that you are complying with all relevant laws.
2. The Franchise Disclosure Document Contains Essential Information
You and your partner should request the franchise disclosure document (FDD) before finalizing your purchase. Look for professionals who can help you review the FDD. Then, sift through the FDD and learn everything about what you’re getting into. The FDD will tell you everything you need to know about your potential purchase, including the fees, obligations, and financing options. This document will also provide vital information about the corporation’s background and operations. Finally, it should also provide a snapshot of critical matters about finance, including the corporation’s balance sheets.
All the information you need about a franchisor should be in that FDD. However, if the FDD doesn’t answer all of your questions, you can still ask the franchisor directly. According to the Federal Trade Commission, you can request the FDD after the franchisor agrees to consider your application.
3. Training Will Likely Be Required
Many aspiring entrepreneurs like the idea of not working for a business anymore. If that also enticed you and your partner to franchising, you should know that the franchisor still has some say over what you need to do. For instance, they can make franchisee training mandatory.
Attending franchisee training is not necessarily a bad thing. You may benefit immensely from training if you’re still new to this occupation. That said, franchisee training will likely be an ongoing process because franchisors want everyone on the same page whenever new tools and methods are introduced. Therefore, you and your partner must be ready to commit to that training.
4. Improving Your Franchise’s Cybersecurity Is a Collaborative Effort
When you were an employee, you could focus on your job and leave business matters up to your bosses. Now that you’re transitioning to the boss role, you must be wary of security concerns. We’re not just talking about securing your franchise’s physical location. Cybersecurity should also be among your foremost concerns. In the first half of 2019, researchers suspect over 4 billion records were exposed via data breaches. Your job as a franchisee involves protecting your investment against those security threats. Hire experts who can keep your franchise’s data safe and routinely ask them to update your cybersecurity infrastructure.
You and your partner should be heavily involved in strengthening your franchise’s cybersecurity. Phishing attacks have gone up by 600% since the start of the pandemic. Phishing attacks these days can be very sophisticated. The two of you must be able to avoid those phishing attacks consistently.
Purchasing a franchise with your partner could be a more significant step than combining finance accounts. Run through the things we discussed here with your partner so both of you can understand what you’re getting into. Best of luck on your journey!
