Corporate Work
Corporate Work
We also specialize in the business aspects of franchising. We help you run your company while protecting your personal and business assets. Our corporate services include:
- Business Formation and Governance
- Business Law and Transactions
- Non-Compete and Non-Disclosure Agreements
- Business Purchases
- Buy/Sell Agreements
- Joint Venture, Partnership, and Shareholder Agreements
- Management Agreements
- Mergers and Acquisitions
Mergers and Acquisitions
Franchise mergers and acquisitions are common in the franchise industry. Sometimes, franchisors opt for franchise restructuring and management buyouts instead of mergers and acquisitions.
There are several reasons why a franchisor may go into a franchise merger and acquisition:
- To expand base of customers and franchisees
- To obtain new products or services
- To accelerate growth
- To wipe out a small and effective competitor
- To acquire existing technology and infrastructure (and avoid delays and expense of developing same internally
Mergers and acquisitions require a thorough due diligence review and analysis of the company’s assets, liabilities and business operations, including:
- Performance of franchised and corporate-owned stores
- Planned openings and closures of franchised and corporate-owned stores
- Franchise and dealer termination history
- Pending litigation
- Existence, status, and strength of any franchise or dealer association
- Number and talent of existing marketing and sales personnel
- Number of pending defaults and their nature
- Status of disclosure documents
- Assignability of the franchise and dealer agreements
- General tenor of the relationship between the franchisor and its franchisees
Protecting You in Franchise Acquisitions
In any franchise acquisition or merger, there exists the risk of brand dilution from merging brands or rebranding after the merger. Even more risky, is the complete exclusion of franchisees who are not allowed to be part of the new post-acquisition system. Wrongful terminations are common in franchise mergers and acquisitions.