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Strategic Affiliations –  A Medium of Growth, by Design

Posted by Craig M. Morgan | Jul 18, 2018 | 0 Comments

704.412.9450

Strategic Affiliations is a growth plan developed by the attorneys at Providence Law, incorporating:

  • Scaling and Growth; 

  • The Retention of Control, in the owners/founders;

  • Intellectual Property and Branding: protection and implementation;

  • Expense: leveraging the investments and capital of third-parties;

  • Management/ Oversight: the day-to-day responsibility of the third-parties;

  • Systems;

  • Additional Revenue Streams. 

What are Strategic Affiliations and How are they different from Franchising?

At its core, franchising is a medium for growth, an opportunity to scale while leveraging the assets of others – namely, time and money.  Yet, it is not the only option for growth.  

Success!  You've grown a successful business and frequently have people inquire as to opening one of your stores.  Sound like you?  If so, congratulations!  Growing a business is challenging and many fail.  Yet here you are, positioned for growth! 

$$$: The Cost to Franchise - a barrier to entry!  Converting an independent business into a franchise is a significant process.  It takes time and is very expensive.  The cost can be preclusive in preventing a business from converting to a franchise.

Franchising Formalities, Initial and Ongoing!  Many business owners are unaware of the requirements and formalities associated with franchising.  Compliance, with many different laws, and many different governmental agencies, must occur, including federal and state.  The initial expense, in forming the franchise documents (e.g. the franchise disclosure document (FDD), franchise agreement (FA), operating manual…), is high.  So too are the ongoing compliance requirements and expenses. 

Given the expense, formalities, and ongoing obligations involved with franchising, many successful businesses are precluded from this form of expansion.  

If only there was another way…?

The Alternatives!  If the goal is expansion, such can be accomplished through the medium of Strategic Affiliations.  To do so takes skill and planning, yet we provide such counsel.

As an alternative to franchising, we regularly counsel our successful business owners to explore Strategic Affiliations. Via Strategic Affiliations, we promote our clients' goals – expansion – while avoiding the significant costs and burdens associated with franchising.  

CONTROL:  We vest control in the hands of You, the founder and business owner. This is of paramount importance; a business owner must protect their interests. This ensures the brand is protected and quality maintained.

The Strategic Affiliations approach of Providence Law ensures that control remains in the hands of the owners, the founders, in those that beget the success upon which expansion is now occurring.  

BRANDING:  Intellectual Property (IP) is a foundation of expansion.  Multiple locations bearing the same name, the same marks, trade dress and images – this is all done through IP.  

Our Strategic Affiliations approach to expansion incorporates Intellectual Property.  We ensure Your brand is protected. While expanding via Strategic Affiliations, your brand must remain consistent for the benefit of your customers and clients, so that they can recognize and enjoy the services You provide. Your brand must be protected and consistent for You, as owner, to maximize profit and to limit competitive-brand theft.

RESOURCE ALLOCATION (OF OTHERS):  At Providence Law, we help direct resources to their highest and best use. Growth via Strategic Affiliations affords You, the business owner, the opportunity to scale while utilizing the resources of others.  

We structure management and funding to be the obligations of the affiliates, while maintaining control in your hands. This affords our business clients a great luxury: calculated expansion and additional revenue streams with limited capital expenditures and limited managerial obligations.   

At Providence Law, we provide counsel for franchisors and franchisees.  Franchising is my core practice area; it's practically in my blood. The purpose of this article is not to disparage franchising. Rather, this article is designed to make you aware that other options for growth exist.

Growing your business starts here , with Providence Law.

Contact Providence Law for more information about Business and Franchise law. 

Providencelawcarolina.com | 704.412.9450

On Location in Charlotte and Lake Norman

Providence Law serves clients throughout NC.

We counsel Franchise clients throughout the U.S.  

About the Author

Craig M. Morgan

Craig Morgan's practice areas include business and corporate law, franchise law and general corporate counsel. He has represented a variety of businesses including franchise businesses and independent, privately held companies. Craig has represented clients in negotiations and ...

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