If you make $100 in profit, that $100 on the open market is worth the multiple of the earnings in the business it is generated. If you pay that $100 in royalties to the franchisor, that $100 becomes an expense to your operating unit and profit to the franchisor. By Tom Spadea
As a franchise attorney, I am often asked what makes a franchise system succeed. What separates the brands that grow past the point of royalty breakeven and get on track for explosive exponential growth? By Tom Spadea
As attorneys, we protect our clients with the contracts we write, the clauses we negotiate, and the words we choose. However, words are not magic and not the end of the discussion in any legal analysis or dispute. The words are a road map and documentation of what the parties intended the legal relationship to be, but they aren’t the “last word,” so to speak, in most instances. By Tom Spadea
Seems like a simple enough question. However, I think many franchisors forget they are in two businesses. One is the underlying subject matter expert on the service provided to consumers, such as a restaurant, gym, roofing, etc. But the second, and increasingly more important, as your system grows, is the business of franchising. By Tom Spadea
As a franchise attorney, I have had the good fortune to watch a number of brands grow from small businesses that looked more like a side hustle, to enterprises courted by multiple private equity firms willing to dish out 8-figures to the founders. By Tom Spadea
It’s that time again, when most franchisors start to think about updating their Franchise Disclosure Document (FDD) for next year. Around the time this article gets published in early December, if you are a franchisor client of ours, you should be receiving your first “FDD Renewal Reminder” email. By Tom Spadea
Every month I sit down to write a column about the things that are important and impactful to a franchisor from my perspective as a franchise attorney. This month, I decided that nothing says it better than one of my favorite phrases; the devil is in the details. And the details that trip up many franchisors are the state of their franchise agreements. By Tom Spadea
Ideally, people buy a franchise because they believe in the franchisor and the system, so it stands to reason that they would be eager to follow that system for the benefit of all. Unfortunately, it won’t come as shock to most franchisors to hear that it doesn’t always transpire exactly as planned. By Tom Spadea
A few years ago I visited London with my wife and kids and one of the highlights for me was our visit to Churchill’s War Rooms. In this time of uncertainty and stress, it calms me to think about what others have endured and overcome. When things happen that are completely out of our control, all we can control is how we react. By Tom Spadea
As we immerse ourselves in this renewal season, franchisors have an opportunity to rethink and rework sections that may be holding them back in the short term and costing them in the long term. By Tom Spadea