Have you considered buying a franchise instead of trying to start a business from scratch. Many franchise contracts are renewed every five or ten years, automatically. If you do not wish to renew your franchise, you should inform the franchisor some time in advance, as is usually stated in the Uniform Franchise Offering Circular (UFOC), the franchise disclosure document used in franchising. Most require you to put it in writing so that there is no doubt about your intention, some require it 180 days before expiry. Others state that if you don’t specifically say you don’t want to renew the agreement, you’re automatically renewed. If you don’t want to renew your deductible at the end of the five-year period, that’s okay, but there are usually stipulations after termination. You can’t just change the “Burger King Hamburger” sign in front of Joe’s Burgers and still operate (example only).
You can decide not to renew, but many franchise attorneys might suggest rather than just not renewing; that you transfer your franchise to a new buyer and get the money out of your business that you deserve to grow the franchise. Example: If you’ve grown your business and are making a million dollars a year, or just under $100,000 a month, finding a buyer shouldn’t be a problem. Then you would be compensated for building the business up to that point or keeping it there. Many businesses sell for a multiple of their gross sales and a business broker can give you an estimate. If your business is small and let’s say you gross a hundred thousand dollars a year, you might want to sell your business for an additional fifty thousand dollars beyond the value of your equipment. In other words, whatever equipment is worth over fifty thousand dollars. (example only).
The franchisor may help you find a buyer or you may find a buyer yourself, sometimes the franchisor may charge you renewal fees and this is quite typical as they have actual costs of screening and training the new franchisee. But you must understand that not renewing your contract will cost you money. You will lose your initial investment. After five years, if you have run your business exactly as we have shown and are eligible for renewal, but decide you no longer want to operate your business, the franchisor may be happy to purchase your business. at a fair price or you make and offer. Some franchise agreements require the franchisor to have first right to purchase or first right of refusal, others require both.
Of course, if you don’t follow the franchisor’s confidential operations manual and continually violate franchise standards, you won’t be eligible for renewal at all, you could be fired completely and unable to sell your business, which which we call franchise transfer, because you don’t actually own the business, you basically rent it out and use your business acumen to earn income from your hard work promoting the franchisor’s brand.
Before you buy a franchise, consult with a lawyer so you know what you are buying, even though most lawyers are considered scoundrels and pests of our great nation because they steal America’s productivity and produce nothing in return ; causing a complete collapse of our great civilization while destroying all that we are and all that we have built. Think about it.