Legal Question in Tax Law in California

Hi, I would like to buy a franchised children's dance business (Kinderdance). I received a 139 page contract that is a little intimidating to go through and understand all obligation fees. Are franchises a safe and profitable investment or am I wasting my time?


Asked on 9/03/15, 2:35 pm

1 Answer from Attorneys

William Christian Rodi Pollock

Buying a franchise if similar to the purchase of any business. It depends on the operation, it's profitability, its cost structure and a substantial number of other factors. You need to understand in detail exactly what the benefits and obligations (not to mention costs) are. For example, who owns the land or holds the lease? What are your exact obligations to the franchisor? What assurance do you have that existing customers will remain with you. What are you paying for the business. Are you purchasing stock or a company, or are you purchasing assets? How can you avoid debts or obligations of the former franchise operator?

These are only a few of the very basic questons. You can rest assured that no attorney will advise you whether this is a good or safe deal. That decison is yours. And there are no answers applicable to every franchise. Every one is different.

I strongly reccoment you consult with a capable attorney with familiarity with these business purchase issues and a good CPA to help you understand the business operations and profitability. .

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Answered on 9/03/15, 2:56 pm


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