Common Mistakes and Misunderstandings in Franchising

Franchising is a tricky industry with pitfalls many new business owners or operators must be aware of. Some of the most common mistakes and misunderstandings in Florida franchising include the following:

• Failing to learn about your product
• Failing to recognize that dealers, distributors, and licensees may in reality be franchisees
• Failing to have experienced legal counsel
• Failing to market your franchise

Mistake #1: Failing to learn about your product

Whatever the type of product it is that you plan to sell, you must find out as much as possible about it. Ask yourself if you are comfortable selling the product. This is key to doing well with your business. Do not fail to do your due diligence.

Mistake #2: Failing to recognize that dealers, distributors, and licensees may in reality be franchisees

Licenses and distributorships are often in reality franchises subject to the complexities of franchise law. For a trademark license not to be a franchise, the parties must eliminate all control other than what is necessary to maintain the trademark, assistance, marketing plan, and continued financial interest. For a dealership or distributorship to not be a franchise, generally, the only type of payment that can be paid to the supplier is a bona fide wholesale price for goods offered for resale.

Mistake #3: Failing to have experienced legal counsel

Franchise agreements are creatures of the law. They entail detailed and lengthy descriptions and include significant information that impacts your franchise. An attorney familiar with franchising laws can guide you through the process of franchising and ensure that you understand all the details of your franchise agreement.

Any promises made to you during negotiations to buy your franchise should be in writing. A contractual issue that arises after you have signed your franchise agreement may be difficult, impossible, or expensive to correct. Hiring a franchise lawyer can help you avoid being surprised later. It is best to rely upon your own franchise attorney, not the lawyer of your franchisor.

Mistake #4: Failing to market your franchise

Your franchise product cannot sell itself. While product and name recognition are pluses, you need your customers to want your product and not the product of your competition. There is no substitution for local marketing and promotion.

Remember, franchising laws vary from state to state. Both federal and state laws are involved. Your best bet in understanding all elements of franchising is to contact an attorney skilled in franchising law.

Seek out an experienced Florida franchising attorney for help

Your best bet in understanding all elements of franchising is to seek out an attorney skilled in franchising law. The franchising attorneys of Protonentis & Remley, PA have years of experience with Florida franchises and franchising. If you have questions about franchises in Florida, do not hesitate to speak to a skilled and experienced Florida franchising lawyer.