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Franchise - Partnerships and Starting a
Franchise
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Partnerships have a relatively low rate of success
when starting a franchise. Well, the same is true for any business.
Why?
Most partnerships fall apart within a few years or even
months because of mistakes during their structuring process. In many
cases partnerships are put together because one person either can’t
afford a business or does not have the expertise to start one.
As a result, exited to find a partner and fulfill an
individual dream, entrepreneurs rush to get started before taking
care of some important details. Here are some things that need to be
considered when starting a franchise business in a partnership:
1. What is the exits strategy? – Maker sure that you share
the same vision of where you want to be in 5 years. If an offer
comes along to buy your franchise, what will you do?
2.
Decide what to do if you stop agreeing on things – effective dispute
resolution tools need to be put in place before you get started. You
are going to spend a lot of time with your franchise partner, don’t
expect to agree on everything.
3. Decide who is the boss –
it is almost impossible to run a 50/50 partnership. Someone needs to
be the boss or the CEO. This way you know who is responsible for a
final decision from the beginning instead of having to decide that
each time on the spot.
4. Consider a Limited Partnership –
Make sure that all the liabilities in your business are clearly
spelled out. Getting a limited partnership agreement in place might
be the best way to go. v 5. Look at some successful partnership
examples – Baskin and Robbins (ice cram franchise) come to mind.
Take you time to research what made other people successful in this
arrangement. When considering a partnership it also helps to consult
an attorney in order to incorporate all the details into a
partnership agreement.
In the end, partnership may be a
great option for you, the key is to give careful consideration to
all your options and properly document everything. |
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