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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:

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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.

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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.

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When you are looking for information about franchise opportunities online, you will find lots of sites that promote their own franchise rankings and offer franchise reviews.  While some of these rankings and reviews provide useful insights, it is important to understand their limitations as well.

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Food franchises account for nearly a third of all franchised outlets in the United States. As a result, the health of the food franchise industry is crucial to the health of the franchise industry as a whole, and trends in food franchising often make their way into other sectors.

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The COVID-19 pandemic has had an unprecedented impact on our education system. With many students missing months of school in 2020, and with students across the country attending class remotely and relying on working parents for daily guidance in 2021, experts are forecasting long-term impacts for students of all ages. As reported by the Organization for Economic Co-operation and Development (OECD):

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While the start of the New Year was a symbolic refresh for many people, as 2021 is now in full swing, it is clear that things are still far from normal. Spikes in COVID-19 cases are once again triggering new shutdowns and restrictions around the country, and many business owners – franchisees in particular – are struggling as a result. If your franchise is at risk in 2021 due to the effects of the pandemic, what do you need to know? Here are some important insights from franchise lawyer Jeffrey M. Goldstein:

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Entrepreneur.com recently released its Franchise 500 list for 2021. The Franchise 500 is the online media platform’s annual ranking of the best franchises in the United States. If you are thinking about buying a franchise listed on the Entrepreneur.com 2021 Franchise 500, we encourage you to inquire about one of our fixed-fee franchise business review programs.

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Attending large franchise conventions and visiting the franchisor’s headquarters are two hallmarks of the franchise due diligence process. They are also two events that have largely been put on hold during the COVID-19 era. But, franchisors are still selling – and franchisees are still buying – and those who are thinking about buying a franchise must still perform thorough due diligence in order to make an informed buying decision.

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If the start of the New Year has you thinking about buying a franchise, there are several important factors you will want to consider as you evaluate different franchise opportunities and make your final decision about moving forward. While many of these factors have to do with the financial aspects of buying a franchise, you need to consider the pertinent legal issues as well, as failing to protect yourself legally could potentially put your franchise in jeopardy. Here, national franchise lawyer Jeffrey M. Goldstein discusses four important legal considerations for individuals who are thinking about buying a franchise in 2021: 1. How Have Other Franchisees Fared During the Pandemic? Even once the COVID-19 vaccine is available to everyone nationwide, things still won’t fully be back to normal for some time. As a result, while there is reason for optimism in 2021, as a prospective franchisee, it is still important to take cues from 2020. Within the brands you are considering, how have existing franchisees fared during the pandemic? Are they optimistic about the future? You can find franchisees’ contact information in the Franchise Disclosure Document (FDD), and you can – and should – speak with many franchisees during the due diligence process. 2. What Will Happen if Your Franchise Isn’t Successful? No one wants to think about the possibility of failure when buying a franchise. But, the reality is that addressing this contingency is one of the most important aspects of ensuring that you have reasonable legal protections before you […]

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