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How Your State Could Impact Your Franchise

By Thomas Scott

There are many things to consider before purchasing a franchise: the industry, the investment level, the franchisor, and more. But how your state impacts your business is one thing that might not be top of mind.

Each state has unique business laws, successful industries, and economic development. These state laws and regulations can greatly affect how you run your business and even influence your bottom line. Before starting or purchasing a senior home care franchise, consider these ways that your state could impact your success.

Franchise Registration by State

At the state level, there are franchise registration and regulation obligations that franchisors must comply with to register your business. Registration, filing, and disclosure requirements will vary by state. But generally, these franchise registration requirements fall into several buckets:

  • Non-Registration States: Some states, like Idaho and Alabama, do not require franchisors to register. The franchisor must submit their Franchise Disclosure Document (FDD) to the state to sell franchises there.
  • Franchise Filing States: Other states require franchisors to submit their FDD but do not require further approval.
  • Franchise Registration States: These states require franchisors to file their FDD, pay a fee, and submit registration paperwork for approval. The filing fee varies by state as well. Franchise regulation states may take a closer look at the registration and can either approve or deny its status.

Before you get started, look into the business registration process for your state and discuss any ramifications with your franchisor. You’ll want to know how much time and money it will take to get your franchise registered. For those in a supportive franchise system, your franchisor will be a hands-on partner guiding you through these processes.

RELATED CONTENT: 7 Ways You Can Expect Support from a Franchisor

Business Licensing & Permits

Many businesses require various licenses and permits to operate legally within a state. These can include business licenses, health permits, sales tax permits, and more. State and local governments regulate these requirements, and compliance is crucial to avoid legal issues or potential fines. Failing to obtain the necessary licenses and permits can also harm your business's reputation and customer trust.

Researching and understanding your state's specific licensing and permitting requirements is essential. Consult your state's Small Business Administration (SBA) office or visit their website for guidance and resources to ensure you're compliant. If your franchisor has offices already open in that state, confer with the support team or other franchisees to learn more.

State Minimum Wage

While there is a federal minimum wage established, minimum wage laws by state also vary. So, what your state decides on as a minimum wage could affect your franchise.

On one hand, paying employees a higher wage and providing benefits can attract better talent and more devoted employees. However, it can also greatly impact your bottom line.

Prospective franchisees must consider projected labor costs. It’s important to know the requirements in your state or region and to stay on top of changes from the federal government. If there is a franchise owner in your state, reach out and see what they offer caregivers and staff. You can also conduct "secret shopper" calls to gauge how much agencies pay employees in your area.

Local Economy

There are multiple economic factors within your state that could also potentially impact business owners. For example, tax policies, labor market rules, and environmental protections. These factors could impact how well your business performs and grows within your state.

Before pursuing a business opportunity, check local competition. Research how particular industries are performing in the state you are interested in.

Luckily, for those considering a senior care franchise, growth is prominent across the country. Baby boomers are the largest population and are reaching retirement age, meaning there is a large demand for in-home care. And as those seniors continue to age, there is a large pool of prospective clients who may need home care.

RELATED CONTENT: How Economic Cycles Affect Business Owners & Employees

Relationship & Termination Laws

Several states have enacted franchise relationship laws that govern the relationship between franchisors and franchisees. These laws typically include provisions related to termination, renewal, and non-renewal of franchise agreements. They may require good cause for termination and impose restrictions on the franchisor's ability to refuse renewal.

Additionally, some states rely on a covenant of good faith and fair dealing in franchise agreements. This means both parties must act in good faith and fairly toward each other. These laws impact how disputes you and your franchisor resolve disputes, and they may affect termination decisions.

These are just a few of the ways your state could impact your franchise. For a more in-depth look into individual state laws, turn to your franchisor. To learn more about how Caring Senior Service navigates state regulations, reach out to our team today.

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Tags: Franchise Ownership