A business opportunity can be enticing for Florida residents who want to achieve success on their own terms. Franchises are a good way to start a business without needing to go from the ground up. However, people can let their excitement get the better of them and they might make costly mistakes as they proceed.
According to Florida law, those who are offering a business opportunity are prohibited from specific acts that might misrepresent various aspects of it. This includes finances, the products being sold, how it must be operated and more. For people planning on purchasing a business in this way, it is wise to be protected under the law and know what steps can be taken to avoid putting personal finances and their future in jeopardy.
Be aware of potential misrepresentations
There will need to be a financial investment into a new business. If the entity or individual offering that business does not give a clear and concrete number or range of what must be paid, it is a form of misrepresentation.
Other types of misrepresentation include whether there will be other franchises sold in the nearby areas that would negatively impact sales and income; the product or service itself and its potential for growth; how much training and oversight is required; how much income and debt can reasonably be expected; and if there are justifications to terminate, transfer or renew the agreement.
There might also be attempts to attach a highly successful product to the business opportunity when there is no connection apart from that of a customer and provider. An example would be a soft drink company that everyone knows as a major force in the market. Saying there is a link when there is not one is illegal. Offering “exclusive territory” is another form of misrepresentation as it suggests others cannot start the same business under the company’s umbrella in certain areas.
Legal protection is critical for business owners
Whether it is deciding to buy into a business or after having done so already and facing challenges because of it, it is imperative to know what options are available to be fully protected. Illegal activity should not be accepted and there are ways to hold others accountable if they made misrepresentations or committed prohibited acts under business and commercial law.