Legal Entity Options for Your Franchise Business

Tom Spadea

Of all the choices made when starting a business, one of the most important is the type of legal structure to select for a company. Not only will this decision have an impact on taxes, it will also affect personal liability and even the ability to raise money.

This morning on Franchising & You podcast, Tom Spadea, partner and Franchise Attorney at Spadea Lignana talked through the topic of legal entity options across several situations:

  • Legal entity options for a franchise business and considerations for each
  • Considerations for choosing a legal entity for multi-unit and area development
  • Choosing the right legal structure considering implications on future events – voluntary and based upon necessity – sale of business, death of principal and effect on family, death of a partner, bankruptcy.

Listen to today’s segment HERE.

Learn more about Tom Spadea HERE.

Exploring Franchise Opportunities? Help is Closer Than You Might Think!

Great discussion this morning on Franchising & You podcast with Award-winning Franchise Developer, Holly A Ford. Holly shared her 4-step process of working with a franchise broker to explore franchise opportunities: 

  • Establish Business Outcomes 
  • Synchronize Outcomes with Opportunities 
  • Select and Validate Execute

She also shared her four recommended industry segments relating the same to The Fab Four (The Beatles), one of the most influential musical groups of our time. Thank you, Holly!!

Read Holly’s Fab Four blog post HERE.

Listen to today’s segment HERE

3 Steps Ahead of Business Ownership

Many people have a dream of owning a business. It’s an American Dream! But, whether doing so as an independent business or as a franchise there are important initial steps to take to ensure their dream-turned-reality starts off on the right foot.

Improve Financial Health

Review FinancesReview and analyze personal finances. As a first step, it’s essential to understand income coming in and expenses going out each and every month of the year. Think ahead to bills that come due quarterly or annually.

Plan a firm budget. The goal is to ensure living expenses are met for a minimum of one year after starting a business. If a vacation is planned during this period, it must be included in the budget. Pay off all short-term debt to the extent it’s possible and practical to do so.

If savings or income from investments are not allocated for living expenses it’ll be necessary for personal income to continue through year one. Lenders will require a solid plan that is not dependent upon first year income from the new business. This may require a spouse or life partner continuing their employment while the business gets on firm footing.

Review credit reports for accuracy. Challenge all errors and keep records of the same. Organize all financial records including bank statements, investment account records and insurance policies – auto, health & life.

Consider working through the above with an independent financial coach who can provide valuable professional insight and perspective. From a confidential, non-judgmental position they can help resolve some issues requiring attention that may have initially appeared to have been barriers to business ownership.

Network as Much as Possible

Meet with members of the local business professional services community – bankers, attorneys, financial planners, accountants, realtors. Share plans to start a business within the community. Develop a network of these professionals and keep them apprised of progress.

Attend and actively participate in networking events well in advance of commencing business operations. Networking provides great benefits from a very early stage including introduction of the business to the community, support from fellow business owners and assurance of a busy grand opening.

From visiting with business professional to attending local chamber meetings to participating in community functions, personal involvement starts to establish a long-term commitment to the community. Owning and operating a business is about establishing and building relationships. Do so as early as possible.

Be Honest with Yourself

Although working through due diligence is essential it’s important not to over-analyze to the point of procrastination… or even, paralysis. Taking the necessary steps outlined above should set a foundation of being well-informed and yes, a foundation of comfort and confidence, as well.

But, only with an honest evaluation that the steps were actually taken and worked through should a final decision be made to move forward.