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Hackensack Business Law Blog

Succession planning for the next generation of franchise owners

Only 30% of family owned franchises will survive after the owner retires. Furthermore, it is estimated that only 10% of franchisees have succession plans in place. Do you have a plan in place for your children to take the reins once you retire?

What is succession planning? Is it just about retirement? Succession planning is much more than retirement. Transition plans identify specific tasks and timelines that will ensure the smooth transition of business operations and management to the next owner. The prime goal is ensuring order and continuity of the business during all stages of the change. But how does one accomplish such a goal?

Female franchisees on the rise

Over the past year, a focus on women has spread nationwide, even making local waves here in New Jersey. While the dialogue mainly featured harassment topics, discussion of female empowerment in the workplace went hand-in-hand. Women deserve the opportunity to have successful careers.

In fact, women became franchise owners at a higher rate than men since 2011, according to the popular franchising “matchmaker” service FranNet. The growth is significant, considering that women own an additional 7% of total franchises than a decade ago.

What to do when the IRS audits your business

When reading the letter from the IRS alerting you of a business audit, it’s normal to get nervous. Even if you and your advisers had the best intentions when paying taxes, an audit can surprise you. You may start to wonder if an undetected miscalculation could harm your company’s financial health.

An audit does not always mean that your business is in legal or fiscal turmoil. In many cases, the IRS finds no major fault with taxes and resolutions can have minimal impact on the business.

The contract: what new franchisees should consider

When you become a franchisee, you sign a legally-binding contact with the company. Once you sign the contact, you are bound by its requirements, and are stripped of your autonomy. This does not mean that you should not sign a franchise contract, it just means that you need to carefully consider the offered contract before signing.

In general, franchise contracts are lengthy, complex documents that can be difficult to wade through and comprehend. What should you consider before you sign?

What's there to know about insurance dedicated funds?

Tax law and estate planning are unquestionably complex, yet they often go hand-in-hand. When writing or litigating an estate plan, reducing tax liability is usually the key to maximizing payout as either a grantor or a beneficiary. Different investment options have a varying tax liability, so each grantor should understand how they can be applied to a family's financial situation.

New life insurance policies may have the attention of the IRS

An investment option that appears to be working well for grantors and beneficiaries is raising some eyebrows in the Internal Revenue Service, according to Bloomberg. "Insurance dedicated funds (IDF)" are part of private life insurance policies. Investors contribute money as insurance dedicated funds, but because the funds are managed by the insurance company and not the investor, they are not taxed as capital gains funds. 

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