Who to Call First When Franchising Your Business

Should you start with a franchise lawyer, developer, consultant – or all of the above?

TAKEAWAYS:

With so many companies offering to help entrepreneurs franchise their business, it can be hard to know where to start.
Because the franchise industry is regulated at the federal and state levels, franchise attorneys can help franchisors ensure compliance at every stage of their journey.
Franchise developers and consultants can also play an important role in helping new franchisors build brands that grow, scale and thrive.

When you’re thinking about franchising your business, knowing who to trust – and who to call first – is important.

Unfortunately, searching for the answers to these questions online can sometimes create more confusion than clarity. From franchise attorneys to developers, consultants and more, the support that is available to help aspiring franchisors launch and grow a franchise brand is seemingly endless. Understanding the differences between each professional’s services, and determining who to contact first, can be daunting.

In this article, we’ll explore the different roles that franchise lawyers, consultants and developers play in the franchising process, and discuss strategies for deciding who to call before franchising your business.

Differences Between Franchise Attorneys vs. Franchise Developers

Although franchise attorneys and franchise developers play important roles in the franchise industry, each party serves a different purpose. By learning about their respective responsibilities to their clients, you can get a clearer picture about who to contact for help at different stages in the franchising process.

What is a franchise attorney?

A franchise attorney often serves the dual purpose of helping entrepreneurs navigate the legal process of franchising their business and providing legal support to ensure compliance with all applicable franchise laws and regulations. Working with an experienced franchise attorney is critical for every franchisor at every stage of their journey.

The Role of a Franchise Lawyer

Franchise attorneys are responsible for overseeing the legal aspects of franchising a business. They also provide franchisors with legal advice for starting, operating and managing their franchise systems.

As a franchisor, the advantages of working with a franchise attorney include, but aren’t limited to, the following:

Legal compliance. A franchise lawyer can help you navigate complex laws that often vary between states, ensuring that your brand complies with regulations wherever it operates.
Legal documents. A franchise attorney can prepare or review your Franchise Disclosure Document (FDD), franchise agreement, registration applications, notices and other documents, to make sure they adhere to regulatory requirements.
Limiting exposure. Franchise attorneys can help franchisors limit their legal exposure and build sturdy legal foundations for their brands.

By working with a franchise attorney to franchise your business, you can limit your exposure to future lawsuits and avoid regulatory issues while positioning your brand for success early on.

When should you work with a franchise attorney?

Because the franchise industry is regulated by a complex set of laws at the federal and state levels, working with a franchise attorney is critical for every franchisor at every stage of the franchising process.

Examples of situations when franchisors can benefit from the advice of a franchise attorney often include, but aren’t limited to, the following:

Starting a brand. A franchise lawyer can prepare and review the legal documents necessary to start a franchise and establish the legal foundation of your business.
Growing your business. A franchise attorney can review your brand’s legal infrastructure and make sure it’s appropriate for the type of business you operate.
Scaling. Seasoned franchise lawyers can ensure that your brand’s legal structure is flexible enough to support long-term growth without exposing it to legal risks.

Regardless of whether you’re a new franchisor or an experienced founder, working with a reputable franchise attorney is critical for avoiding lawsuits and complying with important regulations like the federal Franchise Rule.

What is a franchise developer?

A franchise developer (sometimes called a franchise consultant) is an outside advisor who helps franchisors develop, grow and scale their brands by providing strategic support, resources and business advice. Credible franchise developers often have extensive experience helping new and emerging franchisors build thriving franchise systems from the ground up.

The Role of a Franchise Developer

Franchise developers provide new and emerging franchisors with guidance for navigating the franchise industry and growing their businesses. Their services typically include strategic support for starting, growing and scaling franchise brands.

As a new or emerging franchisor, the benefits of working with a franchise developer include, but aren’t limited to, the following:

Readiness. A franchise developer can evaluate your business model and unit economics to make sure you’re ready to franchise your business.
Best practices. Seasoned franchise consultants can help you follow best practices to competitively position your franchise offering in a crowded market.
Expert guidance. Franchise developers are often experts in their field and can offer valuable guidance for building a thriving franchise brand.

As a startup franchisor, working with an experienced franchise developer can help you navigate a competitive industry and avoid common missteps that might stall your brand’s growth.

When should you hire a franchise developer?

Although working with a franchise developer is optional, navigating a competitive new industry can sometimes overwhelm new and emerging franchisors. Because of those risks, having an experienced consultant to turn to for guidance can be helpful.

Franchisors can benefit from working with developers in situations that include, but are not limited to, the following:

Preparation. Franchise developers can assess whether or not your business is ready to franchise or help you prepare to franchise later.
Brand positioning. Consultants can offer guidance for improving brand positioning, developing go-to-market strategies, addressing unit economics and budget issues, creating a five-year business plan and more.
Benchmarking. Franchise developers can evaluate benchmarks and offer advice for aligning your business structure, territories, budget, royalties, operations manual and other benchmarks with industry standards that make sense for your business.
Growth strategy. Developers can help you build the right team to handle public relations, marketing, franchise sales, a go-to-market plan and more while setting realistic growth goals.
Differentiation. Quality franchise developers can help improve your franchise sales process by differentiating your offering and providing services tailored to your brand’s unique needs and identity.

When choosing a franchise developer, it can be helpful to look for consultants with a track record of success and whose services are focused on strategic development and franchisor empowerment.

How to Avoid Hiring the Wrong Franchise Developer

While there are plenty of skilled developers out there, not all franchise consultants offer the level of support necessary to build brands that thrive in the real world. To avoid wasting time and money on the wrong developer, it’s important to do due diligence and compare your options before hiring a franchise development company.

Some common warning signs that a franchise developer’s services might not be aligned with your brand’s best interests may include, but are not limited to, the following:

Poor validation. Ask to speak with the developer’s best brand and assess whether their vision, unit economics, franchisee validation, fees and franchise sales are at a similar level to what you’re hoping to achieve.
Unrealistic promises. An example might include a developer promising to give you access to their connections in exchange for a fee – even though connections alone aren’t enough to build a thriving franchise system.
Generic packages. Your franchise sales website, brand story, operations manual and other development materials should be uniquely tailored to your brand’s needs and business model – not generic templates that someone filled in with your information.
One-stop shops. In franchising, if something sounds too good to be true, it often is. Be wary of developers that promise to handle all of your franchising needs under one roof for a low fee – especially if it includes legal services.
No educational resources. A good developer empowers franchisors by connecting them with education resources, like workshops and masterclasses.
Moving too fast. Consultants sometimes push new franchisors to spend money on things they aren’t ready for. Instead, look for a developer that focuses on preparation and readiness before investing in marketing, trade shows or other pricey initiatives.
Something is “off.” To avoid wasting time and money, do due diligence and learn about industry standards, milestones and rates for franchise development by comparing options.

Remember, even though it technically only takes 90 to 120 days to become a franchisor, having your FDD issued is just the beginning of your franchising journey. Instead, set realistic goals for growth and focus on building a strong foundation for your brand over its first 12 to 18 months in operation.

Recap

As an aspiring franchisor, it’s important to remember that franchise lawyers and franchise developers each play different roles in the franchising process. While a franchise attorney provides legal advice to franchisors to limit their exposure to lawsuits and ensure compliance with franchise laws, a franchise developer provides business advice to franchisors to help them build brands that thrive.

It’s critical to work with an experienced franchise attorney before franchising your business to ensure that your new brand has a sound legal foundation wherever it operates. A franchise lawyer can also help you prevent future litigation and regulatory violations. Because the franchise industry is heavily regulated at the federal and state levels, make sure to continue working with a franchise lawyer as your business matures.

Although working with a franchise developer is optional, new and emerging franchisors may benefit from the industry knowledge, guidance and expertise they provide. The benefits of hiring a franchise developer often include support for starting a franchise, strategic brand development, growth coaching and more. By doing due diligence before hiring a developer, you can avoid wasting time and money on the wrong consultants and get your new brand started on the right foot.

Frequently Asked Questions

1. What is the difference between a franchise attorney and a franchise developer?

Franchise attorneys help franchisors navigate the legal aspects of starting, growing and managing their franchise systems while ensuring compliance with franchise laws. Franchise developers play a different role by providing franchisors with expert business guidance and support for building successful franchise brands.

Franchising a business before it’s ready can carry significant risks including stagnant growth and the potential for failure. By working with a consultant to evaluate whether or not their business is ready to franchise, aspiring franchisors can ensure that their new brand will be positioned for success.

Franchise developers can assess businesses to make sure they’re ready to franchise. Developers can also help new and emerging franchisors start a franchise, improve their brand positioning, develop smart growth strategies, meet industry benchmarks and more.