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Franchise laws compared to Membership Agreements

by millerunited, Window Shopper

  • Created: January 22, 2011, 7:43 pm
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3 comments

This seams to be such a grey area when it comes to franchising and membership laws. One of the legal term Franchising and the other 'Business Opportunity'.

 

 I have a business in Ohio and offer website presence as well as start up business materials for people that want to go into business doing what I do. We do not require them to report to us, wear the same shirts or drive the same cars etc. We allow usage rights to our trademarked name, logo's and website. The buy in is around $3500 and a yearly membership due of 10% of the buy-in. We do not require royalties, commisions or percentage of sales. Does anybody know what state requirements are needed to be sure we are being compliant?

 

All we are trying to do is help people get gainful employment for themselves. They set themselves up as a DBA and we give them advice if they call in to us during their membership.

Tags: Discuss Popular Topics, Self Employed & Home Based Business
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MerchantMan | Creator | 2/3/2010 - 6:52 pm

Do a Google search for 'franchise your own business' you will find companies who specialize in just what you need.
Professional Web Site: http://www.elect-mer.com

BusPlanMaster | Window Shopper | 9/19/2009 - 3:14 pm

The devil's in the details. In the agreement that they sign, what are they agreeing to, and what are you agreeing to? It sounds like they are simply entrepreneurs paying for a service, but I haven't seen the agreement (nor would I know what to look for if I did see it). I would take this agreement to a local attorney who basically knows corporate and franchise law. Have that attorney review the agreement and make recommendations for change to keep them as non-franchised as possible. I believe that franchise laws vary from state to state, so keep it as generic as possible so you can work with everyone. In the alternative, construct a simple contractor agreement, with you as the party supplying services. Keep it simple. Keep it direct. And make it easy for either party to cancel out of it. MaryAnnBusiness Plan MasterStart and Finance Your Business Now ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
Professional Web Site: http://www.BusinessPlanMaster.com

CharlotteW | Former Moderator | 9/18/2009 - 10:46 am

millerunited, It doesn't appear that there are many Community members with experience in this subject. I suggest checking with the Federal Trade Commission website or contacting an FTC expert to find out more information. I hope this helps! Please check back and let us know your progress!