If you love working with children and want to be your own boss, buying a child-related franchise may seem like the perfect fit. After all, who wouldn’t want to hit the ground running with a recognized brand and a business format that has proven effective at tens – if not hundreds – of locations around the country?
While buying a franchise certainly can offer these benefits, not all franchise opportunities are created equal, and owning a franchise presents certain unique challenges as well. Providing child-related services also presents some unique risks; and, as a franchisee, you can expect to bear full responsibility if something goes wrong.
If you are thinking about buying a child-related franchise, here are some of the key legal considerations you will want to keep in mind:
1. Liability (and Insurance)
Working with children or providing services to children inherently presents liability risks that are not present for other types of businesses. Children cannot legally waive liability, so you will need to make sure their parents do so on their behalf. While your franchisor should provide a waiver form that contains the necessary language: (i) this language may or may not be enforceable in your state; and, (ii) it will be up to you to ensure that all parents sign before dropping their children off at the door. As a result, you should have the waiver form reviewed by an attorney, and you should be sure that you have a system in place for securing parent signatures even if the franchisor’s system is not adequately designed to address this concern.
When operating a business with liability risks, one of your greatest protections is liability insurance. You may want to work with a broker to develop a policy that is matched to the particular risks of your business, and you will need to factor in your premiums when assessing the potential profitability of your franchise.
2. Safety Risks
When you build out your franchise, it will be especially important to assess any potential safety risks – even if your design is based entirely on the franchisor’s recommendations. Injuries resulting from dangerous conditions on your premises could lead to expensive lawsuits, and your franchise agreement will almost certainly state that you (and not your franchisor) are solely responsible.
3. Employee Screening
If parents are entrusting you with their children’s care and safety, you need to make sure that your employees are trustworthy as well. This means that conducting thorough employee screening will be critical, especially if you will not personally be managing your franchise on-site on a full-time basis.
4. Legal Compliance
From online advertising laws to child safety laws, your franchise will be subject to a host of state and federal legal compliance obligations. Compliance will solely be your responsibility, and your franchisor is likely to provide very little guidance in this regard.
Of course, these considerations are in addition to the general risks associated with purchasing a franchise. To learn more, you can read: When You Buy a Franchise, the Onus to Succeed is On You.
Speak With National Franchisee Attorney Jeffrey M. Goldstein
At the Goldstein Law Firm, we provide comprehensive legal representation and advice for new and existing franchisees; and, for those thinking about buying a franchise, we offer a number of fixed-fee franchise review packages. If you would like to discuss your legal needs, you can call 202-293-3947 or contact us online for a free initial consultation.