le·gal·ese /lēgə’lēz/noun
1. The formal and technical language of legal documents that is often hard to understand. 2. Straight talk from Jonathan Barber
Special Legal Considerations for Home Services Franchisees
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f you plan to operate a home-services franchise, you’ve got some “legal-ish” things to look into. Cleaning, decorating, landscaping, moving and storing, renovating, repairing, and restoration franchisees work in and on customers’ homes, which probably means that specific insurance policies and state licenses will be necessary. Getting these requirements squared away—as well as hiring trustworthy employees—can take a lot of time and money, which could affect your choice of franchise. Following are some areas you should examine in detail from the very beginning of your decision-making process. LICENSING REQUIREMENTS Does your state require a license to perform the tasks involved with a particular franchise? For example, state laws for general contractors vary widely. In some states, anyone who performs work costing a certain amount or more is considered a general contractor and must be licensed to perform that work. If you aren’t licensed, you could face serious consequences, including fines. The first step in navigating this issue is to ask the franchisor what licensing is required 30
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for this particular business. The second step is to look into your state’s licensing requirements. If reading statutes isn’t your thing, find a local attorney who can give you some guidance on whether you need to be licensed. If licensing is required, you should factor the cost of acquiring it and the time involved into your franchise decision. You won’t be making money while you’re waiting on a license. INSURANCE REQUIREMENTS States also may require certain types and amounts of insurance. Your franchise disclosure document should outline the franchisor’s insurance requirements. The franchise agreement should explain the insurance requirements in further detail. You should speak with an independent insurance broker in your state to find out whether your state requires additional insurance—beyond what the franchisor specifies—for the type of business you’ll operate. EMPLOYMENT CONTRACTS Today, most franchisors will not provide you with sample employment contracts because they try to avoid what’s called “joint-employer
