Many entrepreneurs love opening and running their own franchises. It’s a great way to build on both your ambition and knowledge of the local area and work for yourself.
However, franchises have important deadlines you can’t afford to miss. Missing these deadlines can result in some major consequences that might put an end to your dreams of owning a business, no matter what kind of franchise you have. But if you know these deadlines ahead of time, you can keep your business running and concentrate on reaching your full potential as an entrepreneur.
Ready to learn more about each deadline you can’t afford to miss? Keep reading to discover everything you need to know!
Why Are These Deadlines So Important in the First Place?
Below, you’ll find our complete guide to the dates you need to be wary of as a business owner. Before going any further, though, we need to answer the big question: Why is it so important for you to learn these different franchise deadlines?
The short answer is that missing these dates can result in a variety of negative consequences from your franchisor, and these consequences will inevitably cost you both time and money. Speaking of which, the “worst case” for missing deadlines is that the franchisor could terminate your business, resulting in the loss of the brand you’ve been working so hard to create.
1. When Your Business Will Start Operating
Even with a franchise, it can take some time to get everything ready for the grand opening. But check your original agreement: It probably specifies a certain window in which your business must begin operations.
A good franchisor might work with you if you just need more time to get started. However, a franchisor can technically take your franchise rights away if you miss this target window, so it’s vitally important as a business leader that you open your doors within that time frame.
2. When To Pay Fees for Marketing and Royalties
One of the only downsides to running a franchise is that you must pay your dues to the original franchisor. You’ll need to pay monthly fees for marketing and royalties to the franchisor, and that’s simply the cost of doing business.
In many cases, the easiest solution is to set these up as automated payments so you don’t have to stress about the deadlines. But on the off chance that you are manually submitting payments each month, make sure you know when the deadline is and what your interest rates are so you don’t default (more on this topic in a bit).
3. When To File Your Intent to Renew
With any luck, you and the franchisor will have a long and profitable relationship, especially after you hit the ground running. However, they won’t know that you intend to keep working with them until you file your intent to renew the franchise agreement. Therefore, you need to know exactly how long you will have to file this important document.
While the deadlines can be tricky, this can easily sneak up on you. That’s because you typically must file your intent to renew about six months before the end of your current agreement. As always, though, you need to check that fine print: Some franchisors may require you to file the intent to renew up to nine months before the agreement is over, so keep an eye on this important deadline.
4. When You Need To Provide a Notice of Transfer
As noted before, you’ll hopefully enjoy a long and fruitful relationship with your franchisor. But no business ownership lasts forever. Whether the business will be going to a friend, family member, or close business associate, you may want to transfer ownership of the franchise to someone else.
The good news is that doing so is an easy and relatively painless process. The bad news, such as it is, is that your franchisor will have a specific requirement for the minimum advance notice you must give them. This advance notice is usually no longer than two months ahead of when the new person will take over, but it’s important to give the franchisor as much notice as they require in your agreement.
5. How Long You Have To Make Good After Defaulting
We’ve got our fingers crossed that you’ll never have any trouble making payments on your marketing and royalty fees to the franchisor. That’s because if you miss such a payment, it could be grounds for terminating your contract with the franchisor.
However, like the banks and lenders you have worked with over the years, your franchisor typically provides a grace period for franchises that miss these payments (this is known as curing your default). As you might imagine, it is crucially important for you to know how long you have after missing a payment to make things right. Missing payments will be a nonissue so long as you set up an automated payment system, which can ensure you never miss an important date.
Start Your Successful Franchise Today!
Now you know all about the most important franchise deadlines you need to meet. But do you know who can make your wildest franchise dreams into a reality?
Confie has a solid track record of helping entrepreneurs like yourself achieve their dream of opening a business. Ready to start working for yourself? For more information about Confie, contact us today or call at (714) 252-2500.