Franchising Your Brand In The U.S

1. Establishing a Franchising Corporate Structure in the U.S

3. According to research, many investors in the U.S are interested in franchise businesses since they are lucrative. Most international brands desire to enter the American market but find international franchising a bit tricky. Generally, Setting up your international brand in the U.S is similar to establishing an ordinary franchise. Establishing an international franchise business in USA can be tricky and frustrating if not handled well, although we said that it’s as simple as opening a franchise in any other country. Fortunately, an international franchise lawyer can help. U.S Franchise Law Explained You must first comply with state and federal Franchise law to legally run a franchise in the U.S.A. The laws require a pre-sale disclosure, complying with federal & state franchise rules, to interested buyers. The disclosure is contained in a franchise disclosure document. The FDD is provided to prospective buyers 14 days before signing of an agreement or before any money is paid by the interested buyer. Many international brands enter establish themselves in the U.S by structuring a license agreement with an already established brand in the U.S, which is considered illegal if the aim was to expand your brand.

4. Legal Structure of Franchises in the U.S The standard advice is to start a franchising subsidiary based in the U.S for legal purposes. The good thing is that you will still control the subsidiary and will be the primary legal entity for selling franchises. A subsidiary limits the liability of the parent company, minimizes legal exposure, and helps control the presentation of your financial statements. The corporate formation issues to be discussed before starting the franchise include: • Formation state. • Tax identification details. • Entity type. • Bank account details. International Franchise Agreements International franchise agreements highlight how international franchises are to be ran. Generally, it facilitates a good working relationship between business partners. Its contents include:

5. • Expectations of all parties involved. • Obligations, restrictions, and permissions granted to prospective buyers. • Operating scope. • Profit sharing details. • Trademark details. • Property ownership details. Types of Franchises in the U.S You should consider your selling strategy before entering the U.S market, where you can opt to sell individual units or master franchises. isclosures to prospective investors.

6. Individual Unit Franchises This is where you’ll be selling individual franchises to interested buyers all over the U.S. most people establish an affiliate company which becomes the franchisor and the individual units are franchisees. Master Franchise Here, you will be serving a wide territory, which can be a whole state or even the whole of U.S.A. The new investors will be the master franchisees, where they’ll acquire rights of developing and selling franchises in the U.S. Master franchisees become the franchisor to their new recruits (individual units) and are also required to issue pre-sale disclosures to prospective investors.

7. What are the Pros and Cons of International Franchising? Pros The pros and cons of international franchising include: • A wider market. • Brand exposure. • Added earning stream. • Promotes your reputation. Cons • Cultural differences. • Legal challenges. • Intellectual property challenges. • Contractual negotiation issues. • Different laws mean learning how to cope with your competition. • Your competitors can be hostile and drive you out of business.

8. Qualities of Good International Franchise lawyers Domestic and international franchising laws do not vary much, and most domestic franchise lawyer can help you establish an international franchise business successfully. However, some franchising lawyers are better in their trade than others, and when hiring one, the following are some of the qualities to consider: • Wealth of experience. • Good reputation. • Client reviews. International Franchising Best Practices Before investing in an international franchise you should consider the following factors: Legal Representation Since international franchises are governed by international franchise law, you’ll need legal help from an international franchising expert, who will help safeguard your business interests in a foreign land when things become thick.

9. Consider your Competition Some markets are worthy venturing in to but can spell doom for your business without proper feasibility study. Potential investor should research well before committing themselves to avoid losses. Start Small and Grow Gradually Undoubtedly, international franchising is lucrative, but it can also be frustrating when the business fails to grow as expected. Business experts’ advice investors to start small and grow as you learn instead of putting all their eggs in one basket. Consider alternative Channels of Income International franchises can take a while before picking up. Remember you’ll be competing with other business that have already established themselves in the market. Also, it will take time building a reputation to attract customers. Although your business may grow and become successful in the future, you still need to keep it afloat hence, the need for an alternative source of income.

10. An international franchise business in USA should be easy to set up with the help of an international franchise lawyer. They know what’s required to establish an international franchise in their jurisdictions and will help you avoid common pitfalls that hinder the success of international franchises.

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