Business Transaction Services refers to assistance provided to businesses in the course of their operation. The firm aids with a variety of transactional hurdles that may take place at any stage of a business' life.
- Services include:
- Business Formation, including Sole Proprietorships, Partnerships, Corporations, Limited Liability Companies
- Contract preparation, negotiation, and review
- Negotiating lease agreements
- Negotiating franchise agreements
- Negotiating employment contract terms
- Counseling for business restructuring or dissolution
We can't emphasis how much is involved and needs to be considered right at the formation of a company that money spent on legal advice will save you later if things unravel. We recently had a case where the clients used an online service to create their LLC (limited liability company). There are two primary versions of an LLC and which one you use can dictate future problems. They used a member managed and the operating agreement (the brain cell of an LLC) was bland and lacking to say the least. This is the most important part of an LLC and if they wanted to use the online service just to file that might be okay but you never want to go cheap on the operating agreement when you have two or more different interests (real partners) involved in the deal. Due to the lack of provisions on the operating agreement and the back idea in the set up they are on a course to court which will probably require dissolution of the LLC and then things end up in receivership and can strangle the cash flows and operations of the company. Spend now rather than spend more later is a wiser idea.
Reading the language in contracts and understanding all the nuances of ever clause in every paragraph is what lawyers are trained to do. Many folks think it is easy and they can either cut & paste from an internet site or review on their own but to really comprehend all the the rights, liabilities and warranties takes fine tuning from years in a profession that requires that attention to detail and reading comprehension. We have see situations turn on the meaning of an adverb model verb, verb or adverb which many with only lay eyes will miss and in the last catastrophe, it was missed because no one sought legal review of the agreement they signed and now were feeling the bad results of their decision. It pays to get the right direction so that your sailing on a smooth course.
Because all good things can come to an end and business is another jealous mistress who if left unattended will sail off course. When the parties can no longer communicate effectively or one is helping themselves to assets it is often time to seek legal counsel and use the court as an instrument of resolution.
How well things go here in litigation will determine what type of planning was done up front which is so important. It is like laying the foundation of a home that will extend several layers and without a great foundation is prone to collapse.
Ever thought about taking your business concept to market and scaling it or expanding it in a big way? We've seen some phenomenal businesses over the last 50 years e.g., McDonalds, Subway, Jiffy Lube and it goes on and on. Your idea/concept might just be the tool that an aspiring entrepreneur needs to take things to the next level.
It wasn't so long ago that private-equity firms have recently invested in boutique fitness chains, including yoga, spin and barre studio operators. The move underscores the growing popularity of workout classes that aren't tethered to traditional gyms and monthly membership fees.
What is a Franchise?
A franchise is the legal use of another company's business secrets, copyrights, trademarks patents and other business identifiers. A Franchisor offers use of these items in exchange for a fee. The Franchisee uses these items in order to establish and conduct business. California is a franchise registration state. As a franchisor, before you offer or sell a franchise in California, you must first file and register your Franchise Disclosure Document (“FDD”) with the California Department of Business Oversight. The initial filing fee is $675 and the renewal fee is $450. Registration lasts for one year. Note the FDD replaced the Uniform Franchise Offering Circular (UFOC) in 2007.
The relationship between a franchisor and franchisee is governed by the California Franchise Relations Act (“CFRA”) codified at Cal. Bus. & Prof. Code, § 20000 et seq. The CFRA covers renewal, nonrenewal and termination of franchises. There have been some recent changes in the CFRA. Here is what is new.
Once registered, you must renew your FDD registration on an annual basis, and you must comply with the requirements of the California Franchise Investment Law, which defines a franchise as a business opportunity involving a marketing plan, the license of a trademark, and the direct or indirect payment of a fee.
One of the benefits of owning a franchise is that it comes with a lot of support from the franchisor. The downside is that, depending on the company, this support comes with some strict rules that franchisees have been claiming greatly favor the franchisor.
If you're considering buying in as a Franchisee you should know that a franchise is a complex investment. The information in this disclosure document can help you make up your mind. More information on franchising, such as "A Consumer's Guide to Buying a Franchise," which can help you understand how to use this disclosure document, is available from the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. You can also visit the FTC's home page at www.ftc.gov for additional information. Call your state agency or visit your public library for other sources of information on franchising. This is also a great article on how to read the FDD which is one of the most critical documents on either side of the transaction: “How To Reach A Franchise Disclosure.”
We've participated in helping fund and package franchises and get their approvals through the Federal Trade Commission and local (state) business authorities; in California they call this the Bureau of Business Oversight. We work with Franchisors in creating financial models, Franchise Disclosure Documents (“FDD”), operations manuals, market viability studies and other strategic asset planning.
If you have a current and operational business you would like to examine for franchise or licensing please give us a call to book an appointment for a free consult.