Author: Ryan Roberts
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The Scoop on Franchise Royalty Fees
Buying into a franchise is one method an entrepreneur might undertake to start his or her own business. Franchises provide the entrepreneur with name-recognition, training and operational support from day one in exchange for an initial franchise fee and continuing franchise royalty payments. While the initial franchise fee is a one-time lump sum payment, the…
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When to Use an Anti-raiding Provision
As an employer, you make countless investments in your employees. Whether your employees realize it or not, you commit major financial resources, time and training to make your staff a company asset. How do you protect your asset from being looted by a former employee? Consider adding an “anti-raiding” clause to your employment agreements.
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Please Do Not Hire Google, Esq.
You have many choices when selecting a lawyer to assist your startup company…us lawyers aren’t exactly an endangered species. But one decision you should never make is to draft legal documents yourself. These documents are just too critical to be drafted and–more importantly–issue spotted without legal education and experience.Because entrepreneurs are resourceful and capital tends…
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Buy-Sell Agreements: The Stock Redemption Plan
In a couple of previous posts, I discussed the value of buy-sell agreements for businesses with 2 or more owners and also one of the two major types of buy-sell agreements, the cross-purchase plan. This post is dedicated to the other main variation of the buy-sell agreement, the stock redemption plan. Under a stock redemption…
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Buy-Sell Agreements: The Cross-Purchase
If you’re choosing between a cross-purchase and an entity redemption buy-sell, here’s the short answer: a cross-purchase works best when you have a small number of owners, relatively stable ownership, and you actually want the surviving owners (not the company) to end up owning more of the business. If you have lots of owners, you…
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Why Every Entrepreneur Should Listen to 2Pac
Tupac Amaru Shakur is an uncomfortable case study for founders not because his life ended badly, but because his career looks like a high‑velocity organization operating inside adversarial systems: rapid brand expansion, constant scrutiny, hostile counterparties, and almost no slack. He built one of the most powerful personal brands of the 1990s while navigating legal…
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What is a Leveraged Buyout?
A leveraged buyout (“LBO”) is a strategy where someone acquires an existing company using a significant amount of borrowed funds. Typically, the assets of the company being purchased are used as collateral for the borrowed funds. This allows someone to acquire a company without having to outlay a lot of personal or business capital. Then,…
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Negotiate the Basket
In the world of mergers and acquisitions, a “basket” is the amount of damages that must be suffered by the acquiring entity before it can recover from the seller under the indemnity provisions of the acquisition agreement. Three main issues arise in drafting the basket clause: (1) Size–Typical basket amounts are in the 1 to…
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Drug Testing Your Employees
According to the United States Department of Labor, reasons employers implement drug testing are to: Deter employees from abusing drugs and alcohol; Prevent hiring individuals who use illegal drugs; Provide early identification and referral of employees who have drug and/or alcohol problems; Provide a safe workplace for other employees; Ensure general public safety and instill…
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Using a No Shop Clause in a Letter of Intent
If you are buying a business, the process becomes expensive and tedious once the letter of intent is signed. For this reason, I recommend all buyers include a “No Shop” provision in their LOI. This provision prevents the seller from going behind your back and finding other suitors while you are busy with due diligence…