Can you franchise an llc

Taxes, regulations and personal liability depend on how you form your enterprise. You should keep a few things in mind when trying to decide if an LLC is right for you.

First, you should know what your short and long-term business goals are. Consider your long-term goals when deciding whether an LLC is right for you. An LLC is a unique type of private legal entity structure. It takes the beneficial tax effects of a partnership and combines them with the limited liability of a corporation.

An LLC is not a corporation. LLCs are popular for their flexibility. Corporations are taxed twice: Once at the corporate level, and once on the personal level as you take draws.

The agreement clearly states what the buyer provides to you as part of buying into the franchise, and in turn what you are obligated to provide for the buyer. The agreement also lists an up-front fee and any ongoing payments made to you by the buyer. List your business on franchise sites. A myriad of franchise listing sites exist online, where you can list your business franchise according to the industry or category it fits.

Prospective franchise investors search these sites to find business franchises that may be of interest to them. Kristie Lorette started writing professionally in By Kristie Lorette. This step-by-step guide will help you better understand what to expect when you to start a franchise.

The franchisor offers various kinds of assistance to the franchisee, such as training, support services, and advertising. You are the boss in a franchise, but the franchisor provides you with a ready-made template for your new business to follow. Using that template simplifies the process of starting and growing your business.

When you think of a franchise, you probably think of the restaurant industry, like Subway or Burger King. Moreover, while those are popular international franchises, there are franchises for virtually any type of industry.

Examples include:. Franchises differ not only by industry but also by the specific framework they provide for a new business. Each offers a unique take on how to start and build a successful enterprise. In short, you have options when buying a franchise. Starting a franchise as a properly formed corporation or limited liability company LLC offers several legal, tax, and business advantages.

Next, understand your local market conditions. You probably already have a feel for what kind of business can succeed in your area. However, it helps to supplement your entrepreneurial instincts with data.

Some good sources of market data include:. With this information at hand, you should begin sifting through the more than 3, different franchises for sale to find those that most interest you.

Alternatively, you can retain a franchising consultant to help you choose the best franchises for you and advise you throughout the process. You should expand your research by contacting the franchisors that peak your interest.

FDDs are required by federal law and contain extensive information about a franchise opportunity. Among that information are contact details for current franchisees and franchisees that left the franchise system during the past year.

You should use those details to contact the past and current franchisees and inquire about their experience with the franchise. Once you have chosen a franchise, you should sit down and write a formal business plan. Writing a business plan will help you get organized and pitch to investors. You need sufficient starting capital to cover your franchise fee and start-up costs, of course, but you also need working capital to get you through the first leg of your franchise journey.

Here are some possible sources of capital:. The franchise agreement is a binding contract between you and your franchisor. As such, you should hire an attorney to review the agreement before you sign it. Make sure you understand the exact terms of the contract, including all your rights and obligations under the agreement. Most state and local governments require businesses to obtain various licenses and permits before they can do business in the area.

These commonly include general business licenses, tax registrations, health permits, and occupational licenses. Failure to maintain all necessary licenses and permits can result in government fines or worse.

Your franchisor may also terminate your franchise if you do not stay compliant with licensing requirements. Luckily, incorporate. Many franchisees are responsible for building or improving the space where they will operate.

The franchisor will provide blueprints, custom fixtures, and signage, but you will need to hire a general contractor to build your space and prepare it for opening day. While you are building your physical location, you will want to start assembling your team.