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One of the many things entrepreneurs think about is how to grow their businesses. Franchising is one way, but for franchisors who have already done this, there are other options to consider, such as acquiring another franchise. If this is something you are thinking about, come and discuss it with a Georgia franchise acquisition lawyer at Franchise.Law.
We are based in Charlotte, NC, and represent franchisors across the country because our services focus on compliance with federal law. A franchise attorney at our firm is able to represent clients in Georgia, even though we are not licensed to practice in the state. We could provide you with helpful advice and guidance on the best path for your franchise.
In the business world, people often use the terms merger and acquisition in the same sentence. Although similar, a merger and an acquisition have some key differences that a knowledgeable attorney could help franchisors understand if they are considering such a transaction in Georgia. The process is different, depending on which one is the best option.
When one franchise purchases an existing franchise from another owner, it is an acquisition. In a way, it is like any other common purchase, just on a much larger scale. The first step in the process is to conduct thorough due diligence on the target franchise to make sure that it is in a good financial position. Even if it is profitable, underlying debts and liabilities could be a cause for concern. If everything looks good financially, both sides must come together and agree on the exact terms of the purchase, which could take some time to complete.
A merger, in contrast, happens when two or more franchises come together to form one entity. Whether that is under a new name or the name of one of the franchises is entirely up to the franchisors. Much like an acquisition, the parties involved need to conduct due diligence and come up with a negotiated agreement to complete the transaction.
Determining which option is best depends on several factors, such as the types of businesses and the market. Most of all, the process should consider the desires of all franchisors involved.
Everyone must also carefully consider the pros and cons of each franchise transaction with experienced legal counsel in Georgia. Doing so could help them come to a decision on which one to take.
Acquiring an existing franchise has the benefit of having franchisees already established and operational. This means there is no need to start the business from the very beginning, which could result in generating revenue sooner. However, the cost may be high, especially if the franchise is successful.
Mergers have the advantage of combining the markets of each business, resulting in a greater market presence than the two had individually. A merger is a partnership, which means that everybody participates in decision-making. This is what makes the process more complicated, and it can be very easy for the merger negotiation to fail over a disagreement.
If you are trying to find new ways to expand your business, you could consider buying an existing one. A Georgia franchise acquisition lawyer from Franchise.Law could help you determine if this is the right path for you.
We guide franchisors throughout the entire process. Get in touch with one of our attorneys at Franchise.Law today to see how we could help.