Paul N. Ambrose, Jr.Paul N. Ambrose, Jr.2024-02-25T01:00:25Zhttps://www.paulambroselaw.com/feed/atom/WordPress/wp-content/uploads/sites/1602637/2021/06/cropped-Paul-Law-FAV-min-32x32.jpgOn Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=513892024-02-25T01:00:25Z2024-02-25T01:00:25Ztypes of franchise fees they may encounter. Leaping without looking first can lead to preventable stress.
Initial franchise fee
The initial franchise fee is perhaps the most well-known and significant fee associated with franchising. It is a one-off payment made by the franchisee to the franchisor upon signing the franchise agreement. This fee grants the franchisee the right to use the franchisor’s brand name, trademarks and business model. The amount of this franchise fee can depend on the brand, industry and geographical location. It typically covers the costs of initial training and support and the right to operate under the franchisor’s name.
Royalty fees
These are recurring fees paid by the franchisee to the franchisor for their continued use of the franchisor’s brand name, trademarks and ongoing support and services. These payments are usually calculated as a percentage of the franchisee’s gross sales. Royalty fees contribute to the franchisor’s overall revenue stream.
Advertising fees
Some franchisors may require franchisees to contribute to a collective advertising fund to support national or regional marketing and advertising efforts. These advertising payments are typically used to fund initiatives such as television commercials, print advertisements, digital marketing campaigns and promotional materials. Franchisees may also be required to contribute additional funds for local advertising efforts within their designated territory.
Renewal fees
Renewal fees are payable by franchisees when they renew their franchise agreement with the franchisor. These fees cover the costs associated with updating the franchise agreement, providing ongoing support and training and maintaining the franchise relationship. Renewal fees are usually lower than the initial franchise fee but can still represent a significant financial commitment for franchisees.
Understanding the various types of franchise fees is crucial for aspiring franchisees. This knowledge can help them to make informed decisions and effectively manage their financial obligations. By conducting thorough research and seeking financial and legal guidance, aspiring franchisees can position themselves for success in the competitive world of franchising.]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=513882023-12-05T08:39:58Z2023-12-05T08:39:58Zundue influence.
This scenario can be undeniably stressful. As can the reverse, wherein you are concerned that someone else may have exerted undue influence over a loved one’s decision-making. In either event, understanding what kinds of action are generally perceived as undue influence can help you to make informed decisions about how to proceed.
Uncharacteristic changes in behavior or decisions
Sudden or unexplained changes in a victim's behavior or decisions, especially related to significant financial matters or personal affairs, could be indicative of external influence. For instance, perhaps your parents had drafted a will years ago that split things up evenly, but a new will favors certain people.
Excessive persuasion or pressure
An influencer might use excessive pressure, manipulation or emotional coercion to push a victim into making decisions that benefit the influencer. A common example of this is when a beneficiary is also an unofficial caregiver and they threaten not to provide that care if the alterations to the estate plan aren’t made.
Lack of free will
A victim may seem hesitant, fearful or unable to freely express their own desires or preferences in decision-making due to the dominant influence of another person.
Disproportionate benefit to the influencer
If an influencer receives a disproportionately large benefit from the decisions made by the victim, it could indicate undue influence rather than a voluntary decision.
Recognizing signs of undue influence is crucial to protect individuals from exploitation or coercion. Additionally, if you’ve been falsely accused, you need to know how to defend your interests. So, no matter which side of the equation you’re on, it pays to know what legal options you have available to you. Seeking legal guidance is a good way to begin.]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=513872023-08-25T00:24:22Z2023-08-25T00:24:22ZSubway has been the “poster child” for self-cannibalization
Franchise cannibalization occurs when two or more franchise locations within a brand's network are situated so closely that they end up drawing customers away from each other – rather than increasing the brand's overall customer base by bringing in new customers.
Subway has been criticized since the early 1990s for this exact issue. Because franchisees could set up shop quickly, cheaply and easily, and Subway encouraged them to do so, there was no real oversight or planning on how to keep self-cannibalization from happening. Industry leaders say that’s ultimately what’s behind the closure of so many franchises over recent years.
Some businesses seem to do okay with a store on every corner. Starbucks, for example, seems to be able to operate on nearly every corner in urban areas without feeding off each other – probably because they cater to a lot of foot traffic. But not every franchisor is careful – and franchisees (or those thinking about opening one) would do well to remember that market conditions today may not reflect market conditions tomorrow.
Is there anything you can do about it before you get into a franchise?
Before you decide to invest in a franchise agreement, make sure that you look carefully at the market and identify areas where you see the highest potential for growth. You also want to ask questions of the franchisor, to find out if they offer franchisees any form of exclusive territory to prevent overlap and foster a dedicated customer base.
If you want to take a lesson from what has happened with Subway, you have to take the initiative on these topics when you’re considering a franchise agreement – because the franchisor may not. It can help to seek experienced legal guidance before committing to any agreement. That’s the best way to make sure your interests are truly protected before you move forward.]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=513842023-06-01T16:40:14Z2023-06-01T16:40:14ZThe original partnership agreement is influential
Most partnerships begin with a written contract between the individuals starting or taking over a business. That written agreement often includes detailed instructions for what should happen if one partner eventually wants to buy out the other. There may be specific rules for how to value the company or a certain amount of equity that has to be refunded to the partner. Ensuring that one's offer adheres to those rules established in the partnership agreement will be of the utmost importance for someone hoping to successfully buy out their partner with minimal conflict.
A reasonable offer should have room to negotiate
Having a sit-down conversation about a buyout with a partner can easily become awkward, and such discussions frequently turn into negotiations. Therefore, the person proposing the buyout needs to have a starting point for their offer that is reasonable while still giving them the ability to negotiate by offering more if their partner resists. Starting with a lowball offer could seem insulting and might derail the negotiations before they even begin, but offering too much too soon can lead to an inability to further compromise.
Some buyouts end up in civil court
Having the patience to negotiate with a partner and also to give them an opportunity to contemplate the suggested changes is important, but so is the commitment to taking action if they are unresponsive or negative. Especially when the buyout is in alignment with the terms of the initial partnership agreement, those proposing a buyout often need to prepare to go to court to resolve the matter when the other partner is resistant to the suggestion.
A cooperative approach is often necessary to preserve the relationship in the long term, but preserving the business and someone's investment in it should also be a top priority. Having a plan in place before initiating a conversation about a business buyout can take some of the stress and conflict out of the negotiation process.
]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=513372023-02-27T20:29:07Z2023-02-27T20:29:07Z1. They lose voting rights
Sometimes, the majority shareholders or prior owners of an organization will try to freeze out the minority shareholders. One of the ways they may achieve this goal is by refusing to let shareholders vote and have any real say on how the company operates. Scheduling meetings and not notifying shareholders or preventing them from speaking up during such meetings can be a violation of the rights of those invested in the organization.
2. They don't receive dividends
Shareholders should technically receive financial compensation for their investment in the company when it succeeds. However, companies may try to structure or delay payments as a means of forcing shareholders to sell their interest in the company. When the company has generated profits but shareholders don't receive their fair share, they may be in a position to take action.
3. They experience a contract violation
Organizations typically have very thorough agreements with the shareholders that invest in them. There may be certain rights extended to the shareholders beyond the standard expectations. When businesses make promises to shareholders in writing and then do not follow through on them, disappointed investors may have grounds to take legal action against the business.
Shareholder disputes can be expensive for an organization and can also weaken the relationship that investors have with the company they have previously helped to support. Thankfully, recognizing when business litigation is necessary to resolve a shareholder dispute can help people to protect the resources they have invested in a company and their rights more broadly.]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=513302022-12-02T18:52:22Z2022-12-02T18:52:22ZConcern about the validity of documents
Some people challenge the actual estate documents. When you look at the grounds for contesting a will, you will quickly recognize that most of them have to do with issues regarding the validity of the documents.
Sometimes, people challenge an estate plan because they believe the testator created those documents while struggling with dementia or otherwise lacking the testamentary capacity to create a valid will. Other times, family members may suspect fraud or undue influence. When people have questions about the legitimacy of estate documents, the chances of probate litigation drastically increase.
Worries about the behavior of the executor
The personal representative or executor of the estate has a lot of responsibility. The actions that they take can increase the value of everyone's inheritance or diminish what people receive. Sometimes, family members challenge an executor because they suspect embezzlement. Other times, failing to act is the underlying reason why family members choose to challenge the individual handling the estate.
A family history of interpersonal conflicts
Sometimes, family members stretch the truth or manipulate circumstances for personal benefit during estate administration. Disputes among beneficiaries or disappointment among those who did not receive what they expected from the estate might lead to probate litigation.
Some individuals might claim that the testator made a mistake, such as forgetting to include a beneficiary. Disputes involving siblings that don't get along with one another or children who resent a stepparent could potentially lead to lengthy probate litigation.
Understanding common causes of modern probate litigation can help those planning their estates avoid messy complications.
]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=513232022-09-01T21:20:11Z2022-09-01T21:20:11Zstate taxes include:
Corporate income tax
State sales tax
Gross receipts tax
State income tax
State unemployment insurance tax
Excise tax
Of course, your business may not need to pay all of these taxes. The kind of business entity your business is structured as, as well as other factors, will determine what you pay.
Sole proprietors: Tax Facts
For sole proprietors, there is no corporate income tax. There may be no gross receipts tax for you in New Jersey, either, since those are usually only levied in Ohio, South Dakota, Wyoming, Oregon, Delaware, Tennessee, Texas, Nevada and Washington. You should check with a tax professional, though, since franchises or other kinds of companies could be treated differently.
Sole proprietors may also not have to pay excise or unemployment taxes. Some pay the most basic taxes, like state income tax and sales tax.
More than a sole proprietor? You could pay more
If your business is an LLC or corporation, as an example, then you could end up paying a greater portion of taxes. It’s more likely that you’ll need to pay corporate taxes to the state and that this will be levied on top of corporate taxes to the federal government.
You may also have to pay sales tax, unemployment insurance taxes and other taxes to cover employees or other special circumstances.
Getting your taxes right helps protect your business
It’s necessary to realize that you have to get your taxes right to protect yourself and your business. If you pay too little, you could end up owing the state more. If you pay too much, you’re essentially loaning the government your money (and may not realize you deserve a refund). Working with a business tax professional, and even your attorney, can help you understand your situation and avoid making mistakes that hurt your business.]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=512962022-06-20T11:00:13Z2022-05-31T19:43:46ZPeople's rights differ based on your planning
If you die without a will, then New Jersey law determines what happens with all of your property. Your spouse and children will have primary rights, and then other family members also have inheritance rights.
If you have a will or estate plan, then your wishes dictate what happens unless someone challenges your will or other documents. Most estate challenges have to do with undue influence or lack of capacity by the person creating the documents, but people can bring challenges based on illegal estate planning terms as well.
You can disinherit some people, but not everyone
Technically, spouses have a statutory right to inherit a certain portion of someone's estate. If you try to disinherit your spouse, even if you leave very explicit directions about your choice to do so, they can challenge your estate in probate court for their fair share of inheritance.
Children and grandchildren typically cannot bring such challenges, so if you disinherit them and explicitly explain your intentions of doing so in your estate documents, then your wishes will likely hold up even if someone tries to challenge them.
For those who want to do something unusual with their estate plan, understanding the rules that govern inheritance rights in New Jersey is crucial. Learning the law is often an important part of estate planning for those with specific legacy wishes.]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=512912022-06-20T11:00:25Z2022-02-25T20:41:03ZAlternative dispute resolution can help with shareholder disagreements
Alternative dispute resolution systems like mediation are useful in all kinds of legal disagreements. Although many people hear about mediation as a tool for divorcing couples, it can be equally beneficial for a business executive trying to resolve a disagreement with shareholders.
In mediation, everyone has an opportunity to speak about their perspective or needs. A neutral third party serving as the mediator will help guide the conversation and facilitate a settlement. Mediation can lead to mutual compromise and preserve your working relationship with frustrated shareholders.
Unlike litigation, mediation is typically confidential and will protect your company's reputation from the damage possible during a public court case. Additionally, mediation can save money because you won't require the time in court to resolve the matter.
When should you suggest mediation?
Mediation is a powerful tool, but it isn't necessarily something you need to consider for small disagreements, like disagreements about the annual budget. It can be hard to know when a dispute is something you can settle amicably on your own and when it could cause real operational hardships for your company if it progresses.
You can potentially tell from the tone of the shareholders or the actions they threaten to take when mediation is necessary. If the shareholders have decided to file a lawsuit or have already initiated legal proceedings, you might respond by suggesting mediation first. You may also want to consider asking to add a mediation clause to your shareholder agreement so that disputes will typically go to mediation before court in the future.
Exploring all of the options for resolving shareholder disputes can help protect your business's reputation, its relationship with its shareholders and its profit margin.]]>On Behalf of Paul N. Ambrose, Jr.https://www.paulambroselaw.com/?p=512812022-06-20T11:00:38Z2021-11-29T20:12:20ZThe IRS recognizes that one spouse can trick the other
Trusting your spouse does not make you a bad person or a criminal, but it may implicate you in a tax controversy. Especially if you provided all of your financial information, like your income, to your spouse, you probably just assumed that what they submitted to the IRS was accurate. You may have signed the tax return without reviewing it at all.
Now that your spouse faces accusations of tax crimes or has already pledged guilty, you may worry that you could also face charges or that you could become financially responsible for your spouse's taxes. Thankfully, the IRS does have a program to protect those who were not aware of and did not participate in their spouse's tax fraud or evasion. Innocent spouse tax relief can protect you from financial liability for the unpaid taxes, interest and fees your spouse incurred while handling your marital tax returns.
Who qualifies for innocent spouse relief?
The IRS does not automatically exempt spouses from prosecution or financial responsibility due to tax fraud or other tax controversies. You have to qualify based on the IRS's rules. You must have filed a joint return. You must be able to claim that you did not know about the understatement of taxes owed. You also must not have made any questionable transfers with your spouse recently.
If you do qualify, you can potentially protect yourself and your assets from actions by the IRS. Learning more about how the IRS handles major tax issues can lead to better decisions when dealing with a tax controversy.]]>