What Do I Need to Know About Franchising in Illinois?

Perhaps you have considered a franchise in Illinois. If you are unsure how to start and run a franchise or the legal nuances associated with it, solid legal information regarding buying or selling a business is essential. Franchising refers to a contractual relationship between the franchisor and the franchisee. The franchisor owns the brand and the business model, and the franchisee is the person who will operate a business with guidance from the franchisor and the right to use the business trademark.

A franchise often gives entrepreneurs a much better chance at success because consumers already know and love the brand. For example, while you could open your own unique restaurant in Illinois, your statistical chance of success with such an endeavor is low. About three out of five new restaurants will not survive their first year, while four out of five will fail within the first five years. With a franchise, however, you have the strength of an established branch as well as a franchisor who uses his or her own business success to ensure that your franchise is successful.

Consumers are more likely to frequent a business where they know they will receive a consistent consumer experience, regardless of the location. If you are considering a franchise, it is essential that you speak to an experienced Naperville, Illinois business law attorney from Gierach Law Firm to ensure you have all your legal ducks in a row before you jump into the franchise world.

Are There Different Types of Franchises?

There are several different types of franchises, and it is important that you understand the similarities and differences.

• Food and beverage franchises are the most recognizable, ranging from full-service sit-down restaurants to fast food restaurants like McDonalds or KFC.
• Retail franchises sell directly to consumers, regardless of the product. Ace Hardware and Circle K are examples of retail franchises.
• B2B franchises provide services to other businesses. Examples include House Doctors and Koala Insulation.
• Service-based franchises cover many different services to the public, such as Maid-Rite.

Your business goals, interests and strengths, and the market in your specific area will determine which type of franchise you choose. If you are passionate about the food service industry, a food and beverage franchise might be right for you. If you have specific skills and want to focus on customer service, then a service-based franchise, like a fitness center, could be your choice.

What Should I Know About a Franchise Agreement?

Like any business, your franchise will consist of legal and binding documents. The franchise agreement will outline your rights and obligations to the franchisor. The relationship between the franchisee and the franchisor will be spelled out in the franchise agreement and will include things like how the proprietary information is protected, what your financial commitment will be, how you will operate the franchise, and even how you will use the franchise trademark.

Most franchises require initial fees as well as ongoing fees that pay for your right to use the brand and to receive ongoing support from the franchisor. The length of time the franchise contract is valid and when it can be renewed (or issues that would prevent it from being renewed), can be found in a franchise contract. The geographical area where you will operate your franchise will be specifically addressed, as well as the training and support you can expect from the franchisor. 

Contact a Naperville, IL Business Law Attorney

While this is an exciting time for you, it can also bring significant anxiety and stress. The more guidance you have from a Naperville, IL business law attorney from Gierach Law Firm, the better chance of success your franchise has. Attorney Denice Gierach can provide insights into your franchise business while ensuring your rights and interests are always protected.

Along with her law degree, Denice Gierach holds a master’s degree in management, is a certified public accountant, and is a business owner. This education and experience provide a unique approach to clients with business needs. Contact the Gierach Law Firm at 630-228-9413 to schedule a meeting to discuss your business.