A good franchise attorney can advise you on concrete strategies to reduce your monthly expenses from day one

The number one reason that a franchisee fails, is that they did not focus their attention on the things they could do to reduce their monthly fixed expenses before committing to long-term contracts. Most franchisees are so eager to start making money that they fail to place adequate attention on keeping their initial, and potentially long-term fixed, monthly expenses to a minimum.

The single most profitable thing a new franchisee can do is hire a knowledgeable and experienced franchise attorney to negotiate key business contracts on their behalf.

Unfortunately, most franchisees shoot themselves in the foot by not even knowing where to look to cut fixed monthly costs.

Negotiating Franchise Fees and Expenses
Your franchise attorney may be able to negotiate items in the franchise agreement that you on your own would never dare to. Initial fees and ongoing royalty payments are usually flexible even though the franchise salesperson may insist otherwise. Your franchise attorney could save you hundreds of dollar every month by reducing or capping the royalty payments you would owe to the franchisor.

Negotiating Your Commercial Lease
Failing to aggressively negotiate your first commercial lease can cost you thousands of dollars every month. Unlike owning real estate outright, a commercial lease tenant does not build equity when making a monthly lease payment. Your monthly commercial lease payment is purely money out the window. A franchise attorney has the experience of having negotiated many commercial leases in the past and will do so on your behalf and could save you thousands of dollars per month.

Alternative Financing
Most first-time small business owners think that the only way to raise capital to buy a franchise is by borrowing from the bank, like they would if they were buying a house, but there are other ways to round up a lump sum to buy the business. Your franchise attorney can set up a limited partnership agreement that you could present other people you know that may want to partner with you and give you thousands of dollars in return for an equity position in your company. By raising money this way, you are not forced into a negative monthly payment and can use the cash flow you would be paying on your loan interest to reinvest and grow your business.

Before you begin your journey as a franchise owner, you need to consult an attorney whose focus is on the franchising business model. Mario L. Herman is an international franchise attorney that advises franchisor and franchisee clients on legal and business related franchise matters, helping them make intelligent business decisions and negotiate key contracts in their favour.