The next meeting of the Nevada Franchise Business Network is scheduled to occur on Wednesday, April 13, 2011 at Cili restaurant in Bali Hai Country Club, 5160 Las Vegas Boulevard South, Las Vegas, NV 89119. The topic of the meeting is “Financing Options for Franchisors: SBA Packaging and Placement,” and will feature Judy Aragon, C.S.C., with the American Association of Government Finance.
Some franchisors continue to use a different Franchise Disclosure Document for each state that has a franchise or registration law. This approach increases the administrative burden on franchisors, as well as the risk of unintentional violation of a state’s franchise law where more than one state law applies to a transaction.
This weekend (March 19 and 20) I am speaking at the National Franchise and Business Opportunities Expo at the Convention Center in Denver, Colorado. During my presentation, I will be discussing some of the critical aspects of franchising, and the documents that potential franchisees need to review and understand before signing on the dotted line.
A recent decision by a Court of Appeals in Missouri highlights the importance for franchisors of careful drafting of the arbitration clauses in their franchise agreements. Litigation over issues like this — whether a dispute must be submitted to arbitration or instead whether it can be decided by a court — is a huge drain on the parties’ resources (time and money). A franchisor would be well-advised to think carefully about heavily one-sided arbitration clauses before including them in its agreements.
Las Vegas-based Capriotti’s Sandwich Shop is looking to expand. The company is looking for expansion deals that would commit well-funded buyers to open a number of stores in defined territories. This strategy can work very well for a franchise company, so long as it understands at the outset how using development agreements for expansion is fundamentally different from growth through adding single-unit operators.
Economic diversification for Nevada is a critical issue for the state. Other states have rushed to adopt filming incentive packages, which have been successful in luring companies to spend millions of dollars in the incentive states. Nevada is one of a small minority of states that does not have an incentive.