As the housing market rebounds and monies are released for new building projects, the time has never been better for you to buy a construction franchise. Before you make this investment, however, you would do well to understand the legalities behind this move and to make sure you follow several important guidelines in your quest to become a construction business franchisee.
Following these tips and being aware of what your new ownership could entail for you and your finances can help you enjoy a successful construction business career.
1. Acquire the educational background needed: If you want to own a construction franchise, you should have some experience in the construction industry, as well as a background in business management. Earning a degree in business and committing to an internship with a construction company can give you the basics of what you need to know for successful ownership.
2. Have money saved up for this acquisition: Perform your due diligence and calculate how much you will need to buy the operations, other equipment, and services associated with it. How much operating cash will you need? If you have most or all of the money saved up and ready to use, you can save yourself from having to take out a loan or seek out grants to buy the construction franchise.
3. Hire a lawyer experienced with franchise law: Acquiring a franchise is a huge move on your part. Your purchase will undoubtedly require you to enter into stringent legal agreements with the franchisor. You should definitely have a lawyer, such as found at the firm of Dorris & Giordano PLC, and have them review critical documents before you sign any paperwork or agree to anything.
4. A gentleman’s handshake isn’t always legal binding: Get everything in writing! Never agree to anything regarding your acquisition verbally or with a casual handshake. Always get all agreements and details regarding your ownership in writing. Your lawyer can legalize everything regarding your acquisition and keep records to protect you.
5. Consider insurance plans for self and your employees: Just because you are healthy and capable now does not mean that you will be in the near future. You can save your finances and your company if you have plenty of insurance to rely on in case of an accident or unforeseen health condition. Also educate yourself on your state’s laws regarding insurance for employees.
6. Think ahead for 3-5 years or plan a life commitment: You may be on a natural rush at the thought of owning and operating your own construction business. However, you need to think ahead and contemplate if you might want to sell or to whom you could entrust your franchise if you want to explore other business opportunities.
7. Gain confidence to speak up for yourself and the franchise: As a franchisee, you should be eager to advocate for yourself and your franchise when confronting your franchisor. Your ideas and strategies could ensure your franchise’s survival, as well as that of your franchisor.
8. Be aware of federal and state laws regarding your franchise: If you own an interstate franchise, you will be bound to both federal and state laws. You should be aware of both sets of laws and know which set trumps the other in terms of wages, insurance, benefits, and other matters.
9. Before jumping in completely, consider and create a Plan B backup: Unfortunately a successful operation today could collapse into a heap of wasted money tomorrow. Statisticbrain(dot)com charts indicate that 47% of construction companies are still operating after 4 years. Always have a backup plan when it comes to your career and finances.
10. Avoid natural inclination to hire immediate family members and relatives: For various reasons, few things can tank your company like hiring family members. If you want to ensure your success, be honest in your hiring methods and avoid hiring people to whom you are related or with whom you are close friends unless clear and irrefutable rules are established.
The ideas listed above can help you prepare for a successful franchise ownership. With the economy slowly improving, the time could be ideal for you to make this move.
Teresa Stewart opted out of franchising, but after developing a small business, can appreciate the advantages of simpler turnkey franchise operations. As business lawyers, Dorris & Giordano PLC believe in keeping legal matters simple which, for the franchisee client, means getting information and processes that are manageable, useful, helpful and understandable. Their experience and knowledge allows them to competently advocate for clients and deliver best results by making complex matters simple, communicating clearly, and keeping focus on the client.
Photo Credit: Justin Baeder
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