California Small Business Blog

Franchise Terms

At a prior firm, I represented a few franchisees of a major quick serve restaurant chain (that's fast food to you and I). This was some interesting work, especially when you had to deal with the relationship between franchisor and franchisee. But, many people, including some of the franchisees, were unsure of what was what in franchise-world.

Small Business Brief provides a great list of definitions involved in franchise work. For example, company owned means a unit, or store, is owned by the franchisor. Designated suppliers are the suppliers who have an exclusive agreement to provide the franchisees with supplies. So most of this is common sense, but if you want to buy a franchise, you need to do your homework. This gives you a good start.

Finding a business for sale

A lot of people hear about buying an existing business and think its a great idea. As a matter of fact, I received an email today from a former client who wants to start a business. This former client decided to buy an existing business. While this is not the most complicated event in the world, try to find a good, reputable business for sale.

Just for fun, I google'd "Sacramento Small Business for sale" and came up with 1,670,000 hits. That is an awful lot of information on buying a small business. That works out to 1 hit for every 3 people in the greater Sacramento region. And that includes kids!

My point: there are a lot of businesses out there for sale. If you are looking to buy or sell a business, consult first with a business broker to see if they have something that might work for you. And never complete this transaction on either side without an attorney. Good due dilligence could prevent you from becoming another sad story.