How to Be a Successful Real Estate Franchisee

Selling the products of a well-established brand, is the desire of every business person. The good thing is that such a desire can materialize, but the worst part is that most prospective investors do not know where to begin. Establishing a franchise is the solution! Franchises work just fine for all industries. Whether you’re in the real estate business or any other, you can easily set up a successful franchise.

In real estate franchises, the investor is referred to as a real estate franchisee. When you’re a franchisee, you need to seek legal help to protect yourself from future disputes that may affect your relationship with the franchisor (the established business). A franchise lawyer can help protect the interest of the franchisee and ensure they don’t get a raw deal. In the U.S franchises are governed by franchise laws.

Franchise Law

Franchise law is a mixture of federal and state laws that regulate and govern franchises. The laws address different aspects of a franchise, including offer & acceptance, working relationships, and terms of sale. Federal laws require the franchisor to furnish prospective investors with a franchise disclosure document (FDD). At the state level, more disclosures may be required to supplement the federal-level disclosures.

What is a Franchise Agreement?

Franchise agreements are binding and legal documents that regulate a franchise. The contents of a franchise agreement include:

Expectations the two parties.
Obligations of the transacting parties.
Operating restrictions.
Franchise fee payable by the new investor.
Trademark details.

Litigation for Franchise Disputes

Most franchise agreements include elaborate conflict resolution solutions for future disputes which mediation or arbitration. If dispute resolution mechanisms are not part of the franchise agreement, the franchisee or the franchisor can initiate a mediation. Unfortunately, mediation doesn’t always resolve all legal disputes. If mediation is unsuccessful, the disputing parties can seek legal help from a franchising lawyer.

Common Franchise Disputes

Legal disputes in a franchise can cause conflicting interests, hindering business operations and growth. Since franchise laws mainly favor the franchisor, a real estate franchisee should secure representation before business conflict start arising. With good legal representation, a franchisee can expect prompt action and minimum disruptions when disputes crop up. Unfortunately, it’s hard to tell when a business dispute will occur. Common disputes in a franchise include:

Agreement, termination, or disclosure.
Breach of trust.
Non-compliance.
Fraud and false disclosures.
Breach of a contract or licensing agreement.
Enforcement challenges.
Franchise termination disputes

In most termination disputes, the franchisor takes legal action against the franchisee to protect their interests and recover damages. Regardless of the scenario, it’s wise to be prepared beforehand by hiring a competent franchising attorney.

Features of a Successful Real Estate Franchisee

The characteristics of a successful real estate franchisee include:

Capacity to learn.
Patience.
Being able to follow rules and guidelines.
Should be disciplined.
Should have a basic understanding of how small businesses are operated.

Prospective real estate franchisees should consult a real estate franchise lawyer to protect their business interests and uphold thriving working relations with franchisors.