In Texas and throughout the country, many people are experiencing the joys of business ownership through franchises. Before you become a franchise owner, it’s a good idea to think about how to organize your new business venture. With that in mind, here’s a closer look at the three ways you can operate a franchise.
1. Sole proprietorship
Some people might choose a sole proprietorship. In most cases, a sole proprietorship is the least expensive way to operate a franchise. However, this way also means that you’re on the hook for its debts if it goes under.
2. Limited liability company
Another popular option is to organize a franchise as a limited liability company or LLC. This option limits a business owner’s personal liability. With an LLC, the owner is only liable for how much they contributed to starting their business. If you choose to operate as a limited liability company, you can also take on partners as members of your company’s structure.
You can also choose another one of the most popular business organizations, which is a corporation. Owning a corporation removes you from being solely responsible for debts. There is often more paperwork at the state level along with other types of regulations that must be strictly complied with, and it will need to have at least one person sit on its board of directors and conduct regular board and shareholder meetings.
There are several ways for you to organize a franchise. If you’d like more help with this understandably important decision, it’s worth reaching out to an experienced business law attorney. By doing this, you can get assistance with any legal questions you might have.