Many of the people who strive towards financial independence reach their goal by investing in their own business. There are many different paths that can lead to success in the world of business, and all of them are valid, but one of the most popular is opening a franchise. There are a variety of advantages that come with choosing a franchise, from a proven business plan, to recognizable products and a strong support structure. Naturally, all of these advantages come with a few extra rules and regulations from the government. While most of these rules exist to protect the person who opens the business, usually called the franchisee, it’s still important to learn them to avoid running into unexpected problems.

Rules and Regulations

massachusettsThe first and most important rule that every franchisee needs to understand is the federal Franchise Rule. It is a set of regulations from the Federal Trade Commission that establish the basic requirements for information disclosure when buying or managing a franchise. It also establishes the fundamental rights and responsibilities of both parties in the relationship. It forms the backbone of franchise law in the United States, and it exists to protect potential franchisees from scams and misleading advertising.

States also have the right to pass laws that focus on franchising. Massachusetts is a non-registration state, so the state does not require any special licensing or documentation for franchises beyond the federal standard. This means that franchises are relatively unregulated in Massachusetts, but they are still subject to all of the laws that apply to other businesses. They pay all of the same taxes and need to meet all of the same standards when hiring employees or working with the public. These local laws are the ones that are most likely to have an impact on the franchise’s operations on a daily basis, so every franchisee should take the time to research them carefully. Questions should be directed to a local lawyer that specializes in business law whenever possible, since that is the best way to clear up confusion and avoid legal trouble.


location16There aren’t very many things that have as much of an impact on the success or failure of a business as its location. A business that is surrounded by loyal customers can go through many misfortunes and come out in one piece, but even the best manager will have a hard time salvaging a business that is built in the wrong place. The first step to choosing the right location for a new business is understanding the locations that are available, so everyone who wants to start a franchise in Massachusetts needs to study the state’s demographics.

The state has a number of large cities that contain a significant portion of its populations, but it also has plenty of small towns. Both of those options offer opportunities to the aspiring franchisee, but those opportunities are very different, and what will work in one area is unlikely to succeed in the other.

A business in a small town needs to be able to attract a large part of the local population or a large number of people who are passing through in order to sustain itself. That means that rural franchisees should focus on things that everybody can use, like convenience stores, or things that strongly appeal to travelers, like fast food businesses. A franchise that appeals to both groups, such as a gas station, is ideal. Most people who are looking for specialized services are willing to commute to a city to find them, so niche franchises are less likely to succeed in a town than in a city.

The state’s big cities can support almost any type of business. Boston has more than half a million citizens, and Worcester, Springfield, Lowell, and Cambridge all have more than 100,000. Most businesses in these cities will find plenty of demand for their services in the absence of serious competition, but they might run into trouble due to the high cost of land. Franchisees should look for businesses that either sell a huge quantity of good quickly, like fast food restaurants, or alternatively businesses with large profit margins to make sure they can cover their expenses.