Case Studies

CASE STUDY: LEANING INTO YOUR NEW VENTURE

For some people, events in their lives align themselves in such a way as to make them consider starting their own business or practice. With the COVID pandemic came great changes in the expectations placed on traditional employee-employment, it opened up new opportunities for working remotely, and it provided us as individuals additional time for reflection. Consequently, our team has been receiving an increased amount of requests for help in new business startup and creation, planning, and assessment. We recognize that starting a new business is a major life event, usually stemming from a desire to help others – and we applaud and celebrate your decision. [Welcome to the club.]

There are, of course, many things to consider when starting a new business. There is the aspect of personal finances, family and child care, and confidence in the leap of faith it takes to launch a new product or service. And then there are the start-up costs, the hours of effort and strategy, time creating relationships with vendors and potential new clients, and making sure the legal matters are in order.

Sometimes, a seemingly easy task (form the entity, choose the name, etc.) suddenly becomes an overwhelming chore. When this moment presents itself, our team of compassionate, understanding, and highly experienced [human beings] are ready to help you. This is the difference between our firm and any other, and we see it time and time again. You will start asking “will I be most successful as a Limited Liability Company or if I Incorporate; should I form in Delaware or Pennsylvania; can I use the name I dreamt of, or will it infringe on someone’s else’s product or service; do I need a website with terms and conditions; what about opening a business bank account; do I need a Federal Employer Identification Number (EIN) and how do I find that?”

Don’t worry. We have helped hundreds of new business owners successfully navigate through these decisions. This is our teams’ specialty, and no business’s journey is the same.

CASE STUDY: BUYING AND SELLING A FRANCHISE

The franchise industry is booming. Of course you’ve heard of McDonalds, deemed the “first franchise system,” but can you name a local franchise? You might have your grass fertilized by the Lawn Doctor, or perhaps you’ve cooled off with a Kona Ice, purchased from the Vitamin Shop, tried some DIY with Ace Hardware or maybe your gym is a franchise, like Nina Harper’s Pure Barre studio.

What is a franchise? A franchise is usually defined as the method of distributing products or services, which are usually branded and trademarked. The franchisor grants a license to the franchisee to utilize the intellectual property and business system. In exchange, the franchisee pays an on-going royalty and often an initial fee.

Although a franchisor is often a large business, the franchisees operate as a typical local small business owner. They use the system developed by their (usually corporate) franchisors, but they are in the daily hustle just as any local business owner. They buy and sell their locations just like any other business would.

And they have the same risks and opportunities that other businesses do. Their relationship with the franchisor is dictated by the franchise agreement. The franchise agreement is the contract in which a business provides it brands and operational model to another party in order for that party to run a similar business in exchange for a fee and a share of the income earned. The agreement details what roles each party needs to perform and what compensation to expect. Of course, the franchise agreement favors the franchisor, so a franchisee needs solid legal representation to navigate through this, and the Franchise Disclosure Agreement, which can be over 100 pages long.

Just because they have a big business backing them, doesn’t mean they have big business resources when selling or acquiring a particular location or the rights to a geographic location. The intricacies of purchasing an existing franchise can be overwhelming – from the letter of intent to due diligence – having the right team is imperative.

When is the best time to close on the deal? What sales will transfer? What about recurring and subscription clients? Which liabilities transfer and which don’t? What about the lease agreement or real estate involved?

Our team helps entrepreneurs and business owners navigate through these important questions and more. Every opportunity is different, and we take a wholistic and cooperate approach to help you reach your business goals.