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Forming a new business or choosing a franchise

| Jan 21, 2015 | Business Formation & Planning |

Those in Michigan who are considering into going into business often must decide whether it makes more sense for them to strike out on their own completely or if they would rather choose to franchise. With a franchise, the owner will enter into an agreement with the corporation that holds the trademark or name in order to do business under it.

Choosing to jump into the world of business by entering into a franchise agreement carries important considerations. As the purchase of the franchise will involve an ongoing business relationship with the franchise holder, it may be necessary to evaluate all of the terms connected with the agreement fully.

With a product and trademark franchise, people will enter into a simpler franchise form, buying the rights to utilize the trademark or name of the franchisor. The business will then be able to operate using that name while largely being responsible for the overall operation of the business. The more complex franchise form is the business format franchising option. In this type of agreement, the franchisee will have assistance from the franchisor with training, accessing needed funding, merchandise, selection of the business location and other matters. Since the relationship will be more in-depth, such agreements should be fully investigated.

It can be a tough decision to leave the regular workforce and go into business. Franchising may present an option for people who are engaged in business planning and wish to have more control while also feeling more secure. As franchises also may fail, it is important to review the offers presented by the franchisor carefully before signing them. By being careful with the franchise selected as well as the location in which the franchise will operate, the option may provide a beneficial opportunity for new business people.

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