With business loans still hard to come by, it has been a slow year for the franchise market. According to the IFA, the number of franchised businesses had zero growth in 2009, and there’s a forecasted growth of 2 percent this year (for comparison, the growth rate was 4.3 percent between 2001-2005).
To combat the tough climate, some franchisors have been taking steps to make their systems more affordable to potential owners – anything from offering incentives to in-house financing. For the small business owner looking to franchise their concept, in-house financing is probably not a realistic option. However, there are some smaller steps franchisors can take to help ease the process for new owners.
One possibility is helping new owners navigate some of the legal requirements associated with setting up their business after the franchise agreement has been signed. By partnering with a legal document filing service, you can give franchisees a head start toward Incorporating (either a C Corporation or S Corporation), forming an LLC, or filing a DBA (aka Registering a Fictitious Business Name).
After all, these are steps all franchisees must perform – and with a document filing service, a business owner can avoid paying the retainer fees and hourly rates of an attorney. And we all know that during the ramp-up phase, even the smallest savings help.
This is exactly what Richard Giorla, founder of CARDIO BARRE®, did. Richard is a dancer/choreographer who used his 25 years of classical training to create one of the hottest fitness trends in Hollywood today. For full disclosure, I’ve been taking Richard’s classes for years and am one of his biggest fans — CARDIO BARRE® has literally changed my life!
After opening his first studio in 2001, Richard franchised his concept. There are currently six CARDIO BARRE® studios in California, and he is expanding the franchise nationally.
For Richard, partnering with a document filing service is a way to help his franchisees (typically small business owners like himself). He recommends the service for new business owners who have a relatively simple business structure and legal requirements. By doing so, he:
- Saves new owners the hassle of figuring out the legal requirements themselves. They can focus their time on their business, instead of learning the nuances of any applicable federal, state, and county rules associated setting up their business.
- Gives new business owners the peace of mind that they’re setting their business up right
- Saves new business owners money compared with attorney fees
Of course, it’s important to understand that a legal document filing service is just that…a document filing service. They’re not a substitute for an attorney, accountant or tax advisor. A filing service provides the legal resources to help business owners represent themselves to create a legal business entity.
These service companies cannot provide specific legal or financial advice for each franchisee’s set of circumstances. If your franchise owners have particularly complex business needs — for example there are strict requirements for shareholder structure or stock allocation, or are dealing with millions of dollars up front — they should retain their own expert counsel to help them get started.
Yet for the majority of new franchise owners, the general advice and expertise of a reputable filing service is all they’ll need. And like Richard, you’ll find it’s an easy way to help smooth the process for your new owners.
It is possible to handle all of your business filings yourself. It will require doing lots of research to be sure you’re filing the correct documents, completing all of the forms, paying individual fees, and quite possibly hiring an attorney to advise you. With CorpNet.com, you have a one-stop destination for all of your business filings. Everything can be handled at once, and all for an extremely reasonable fee. Check out our list of filing services to get an idea of how we can help you to get started.
This original content by Nellie Akalp was written and published on BlueMauMau.