Monthly Archives: February 2021
For individuals who live in a treaty country and are thinking about starting or acquiring an existing franchise in the United States, one of the first steps is often to apply for an E-2 visa. The E-2 visa is available to foreign nationals who are prepared to invest “a substantial amount of capital” in a U.S.-based business. Due to the benefits that a franchise can offer, many foreign investors choose to pursue a franchise as a means for obtaining an E-2 visa. Here, franchise lawyer Jeffrey M. Goldstein provides an overview of the E-2 visa requirements as well as some other important considerations for buying a franchise in the United States.
The International Franchise Association (IFA) recently released its Annual Economic Outlook Report for 2021. As summarized on the IFA’s website, “The report offers an in-depth look into franchising’s growth trend following the economic fallout due to the COVID-19 pandemic . . . . [T]he report forecasts positive growth expected for franchise businesses in 2021, provided continued federal support, and suggests the potential to reach pre-pandemic levels of economic output by the end of the year.” Here, franchisee attorney Jeffrey M. Goldstein takes a look at some of the key data from the report.
On February 16, 2021, the California Department of Financial Protection and Innovation (DFPI) issued an order requiring Burgerim, a startup burger franchise, to offer rescission and full restitution to its franchisees. As reported by the Franchise Times, Burgerim sold 1,550 franchises over approximately five years, but only about 130 of its franchisees were ultimately able to open for business. As franchise lawyer Jeffrey M. Goldstein explains, Burgerim committed various disclosure violations and engaged in various other forms of improper conduct as well.
A recent article in the Franchise Times discusses the success of an emerging franchise system. In part, the article attributes the system’s success to having an “on-trend brand.” But, making a long-term investment in a franchise based on a trend isn’t necessarily the best decision—as trends can fade long before franchise agreements expire. With that said, if a trend is here to stay, then buying in could prove to be a smart investment. So, how do you decide? Here are some insights from franchisee lawyer Jeffrey M. Goldstein:
It’s Time for Another “Franchise Top 10”: What Prospective Franchisees Need to Know About Franchise ReviewsFeb 12, 2021 - Blog by Goldstein Law Firm |
It’s the time of year when many online publications release their annual lists of the “top” franchises. The Franchise Times is the latest to join the list, with its “10 Top Franchises to Buy” released on February 24. While franchise reviews like these can be informative in some respects, prospective franchisees need to take them with a grain of salt, and they need to make their own informed buying decisions based on thorough due diligence.
Franchisors May Choose Not to Make Item 19 Financial Disclosures Due to Economic Impacts of COVID-19Feb 10, 2021 - Blog by Goldstein Law Firm |
According to a recent article from Franchise Times, some franchisors may choose not to make Item 19 financial disclosures as a result of the COVID-19 pandemic. While franchisors have the option to either provide a financial performance representation (FPR) or make a “negative disclosure” in Item 19, FPRs provide important insights for prospective franchisees who need to gather as much information about franchise opportunities as possible. Here, franchise attorney Jeffrey M. Goldstein provides an overview of why some franchisors will likely forego making FPRs in 2021 and what this means for franchise buyers.