In this episode we interview Earsa Jackson, an attorney and partner with Strasburger and an expert on franchise law. Earsa shares some valuable knowledge and tips for businesses that are considering offering franchises.
About Earsa Jackson:
Earsa Jackson is a Partner with Strasburger, and the Practice Area Leader for Strasburger’s Franchise & Distribution group. Earsa structures franchises and assists franchisors with on-going transactional needs. Earsa also handles litigation matters in the following areas: business and commercial, False Claims Act, business torts, franchise and distribution, trademark infringement, misappropriation of trade secrets, contract disputes and probate. Earsa has written and spoken extensively on franchise issues and is a former Director of the Litigation and Dispute Resolution Division for the American Bar Association Forum on Franchising. Earsa is a Certified Franchise Executive. She has recently been elected to join the Board of Trustees of the International Franchise Association’s (IFA) Educational Foundation, a charitable organization that provides—among other programs—scholarships and research awards.
- Earsa has significant experience and knowledge in franchise law, and is also an attorney who is easy to work with and a great communicator – qualities we believe you should always look for when hiring professionals.
- Why is franchising popular as a growth model? It permits you to expand faster while leveraging the capital and efforts of others (your franchisees). From the franchisee’s perspective, it’s a great way for first-time business owners to potentially reduce their risk.
- Key factors that lead to a successful franchise include: good infrastructure, a solid business model (you know how to make money with the business), you have your supply chain optimized, a strong management team, and good legal counsel. It’s also important to make sure your business is replicable, so that you can easily train others (your franchisees) on how to operate their own unit.
- Being able to replicate your business is critical. Consider running your business as if it was a franchise, even if you don’t expand through franchising. This requires systems and documentation on how to operate every aspect of your business.
- Preparing to franchise your business includes being prepared to offer comprehensive training for your franchisees, and how you will monitor the performance of individual franchise owners.
- People buy franchises in part because they expect that brand to grow and stay relevant. They are look to the franchisor for this expertise and vision.
- Franchising is a separate business from your current operations. You will need a team dedicated to selling and supporting franchises. Someone has to mind your store, and someone else has to mind the franchise business.
- Be careful not to end up with an accidental franchise! Remember the three “M”s: Money, Mark, and Marketing Plan. These are the things, according to the Federal Trade Commission (FTC), that constitute a franchise. You may call it a licensing agreement, but more times than not you are actually offering a franchise without adhering to all of the legal requirements. In these cases, it’s imperative that you consult with a franchise attorney.
- When should you consult with an attorney? As early as possible. Find an attorney like Earsa who offers a free initial consultation. A qualified attorney can help you think through things you may have never otherwise considered.
- People know how to buy a franchise, and statistics show that franchised businesses are more successful than independent start-ups.
- The Franchise Disclosure Document (FDD) is 23 of important information that must be disclosed to potential franchisees. There are also Franchise Agreements, Non-Competes, and state-level registrations you need to be aware of a comply with.
- If you are considering buying a franchise, you should also consult with an attorney before signing any agreement (including a non-disclosure that may limit your ability to consider other franchisors).
- You also need to consider the protection of your Intellectual Property (IP). This includes trademarks and protection of any trade secrets and copyrights. This is important even if you decide not to franchise your business.
- Earsa, and Strasburger, focus on building long-term partnerships with their clients.
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