Michael T. Chulak & Associates represents clients in California regarding matters dealing with franchise, real estate, and corporate law in the following areas:

We represent franchisees, franchisors, buyers, sellers, borrowers, lenders, brokers, and agents.

Michael T Chulak & Associates has extensive expertise in the areas of business startups, formation of business entities, business dissolutions, partnership disputes, reorganizations, and obtaining business capital and loans.

For additional information on franchise law or related topics, please contact us for a no cost consultation. Please visit: What is a Franchise? for an analysis of the legal elements, Franchise Questions and Answers and Ten Reasons to Franchise Your Business.



 

 

Franchise Your Business

The attorneys with Michael T. Chulak & Associates can provide you with the legal services needed to franchise your business for a fixed legal fee. Payment plans are available and we may accept all or a part of your fee based upon barter. Call us to discuss your plans to develop a franchised business. Initial consultations are free.

 

FDD / UFOC Opinion Letter - $950

If you are considering the purchase of a franchise, we will review and prepare an opinion letter addressing the most legally significant provisions of the Franchise Disclosure Document (FDD) / Uniform Franchise Offering Circular (UFOC) and proposed Franchise Agreement for $950.00. Our intent is to enable you to make an informed decision before investing thousands of dollars, thousands of hours of your irreplaceable time, and sign a contract that may bind you for years. We believe in the concept of franchising but want you to avoid making a mistake. How can we provide this valuable service for $950.00? It's our way of introducing our firm so you will call on us for future legal services.

 

Franchise Facts

In the United States:

An average of 300 franchises are acquired every week.
   
One out of every 12 businesses is a franchised business.
   
Franchised businesses generate nearly 50% of all retail sales.
   
Franchised businesses employ over 14% of the private sector work force.
   
There are more than 1,500 different franchises available.
   

Franchise Classifications or Levels

Single-unit Franchise is where the franchisor grants the franchise the right to operate only one franchise unit. The right may or may not be an exclusive right within a defined area.

Multi-unit Franchise is where the franchisor grants the franchisee an exclusive right to operate multiple franchises within a defined radius of a fixed location or within defined zip codes.

Area Development Franchise is generally where the franchisor grants the franchisee a right to open a defined number of franchises within a defined area and where the franchisor has an obligation to open these franchise units based upon an agreed to schedule. With an Area Development Franchise, the franchisee will be given an exclusive area.

Master Franchise or Regional Developer is where the franchisor grants the franchisee an area that is larger than that of an Area Developer.

The Master Franchisee, in addition to opening franchises at a reduced franchise fee and royalty, can also sell single unit franchises, multi-unit franchises and area development franchises and earn a return on the sale of each. The Master Franchise usually receives a percentage of the royalty and franchise fees paid by each franchisee. There may be additional income available from distribution of products through the franchisees in the area. The Master Franchisee will usually open and operate at least one unit (a pilot location), for income and use as a training center. Master franchises are not common; most franchisors do not offer them. The income available from a master franchise can be highly lucrative.

 

 

Investors Available - Franchise Development

If you have the knowledge, experience and burning desire to start a franchise business (as a franchisor), but lack the capital, we may be able to help. We currently have investment capital available to assist in forming the following types of franchises:

Advertising Specialty Items Fitness Center
       
Air Conditioning Contractor Hair Cutting
       

Barter Exchange

Holiday – Christmas Lights

       
Bookkeeping Service Insurance Agency
       
Business Opportunity Brokerage Judgment Collections

Christian Business Directory

Land Brokerage

       

Closet Remodeling

Landscape Maintenance Contractor
       
Collections - Consumer-Business Men's Custom Dress Shirts
       
Commercial Leasing Brokerage

Pest Control Service

Consignment Store - Antiques

Plumbing Contractor

       
Consignment Store - Baby Items Restaurant
   

Co-op Advertising Mailings

Roofing Consultant

Custom Picture Framing

Security Guards, Patrols

       

Executive Suites

Staffing Company
       
       

You must have a proven history of business and / or employment success and be willing to work long hours to create a successful franchise business. If you are the person we have described, please call us today.

 

Advantages to New Franchises

When examining the options available to you as potential owner of a new start-up franchise, you should consider the following possibilities:

New franchisees often get more advertising and other support from the franchisor. All new franchisors want their franchisees to be successful, and generally give extra attention and support to the early franchisees in order to assure that they will be successful.
   
New ideas can sometimes mean big profits for the initial franchisees. If the franchise is highly successful, the franchisor is likely to increase the franchise fee and royalty percentages, making the early franchises worth more money. In addition, early franchisees are often selected to be master franchisors which can result in profits from the sale of other franchises, and possibly a percentage of the royalties paid by new franchisees.
   
You are more likely to be able to negotiate a more favorable financial arrangement with the franchisor.
   
If the franchisor offers exclusive territories, you will have your choice of the most ideal territories.
   
If the franchisor takes the company public, you may be offered an opportunity to acquire stock at a below market price.
   


Mergers and Acquisitions

The law firm of Michael T. Chulak & Associates can assist your franchised or non-franchised company successfully complete a merger or acquisition anywhere in Southern California. This may include assisting you in finding the right business to acquire, a suitable merger partner, raising equity and/or debt financing, and providing necessary legal services.

While the terms merger and acquisition are often used synonymously, the terms are not the same.

A merger takes place when two firms agree to combine into a single new company rather than remain separately owned and operated. When an acquisition takes place, one company remains in business while the other ceases to operate as a separate, business. While an acquisition, technically and legally results in the dissolution of the acquired firm, it is common for the management and employees of the acquired firm to become an important part of the firm that made the acquisition.



Reasons for Mergers and Acquisitions

Mergers and acquisitions take place only when both parties believe the value of the combined firms will be worth more than the sum of the two firms operating separately. If value is created as a result of a merger or acquisition, the owners of both firms can profit by the transaction.

Some of the reasons cited for mergers and acquisitions include:

Often the combined company can reduce its fixed costs by eliminating duplicate costs, operations, and departments. Operating costs as a percentage of gross income can usually be reduced, improving the bottom line.
   
Often special knowledge and experience of the owners and/or senior managers can be put to greater and more profitable use with a larger business and more employees. This is a form of leverage.
   
When a company is larger, its cash flow tends to be more stable because the number of transactions taking place during each accounting period usually increases.
   
Additional locations help the company improve its service to existing clients / customers and attract new ones. Your company also becomes more visible which helps to attract new business. More locations result in geographical diversification which is also beneficial.
   

Mergers and Acquisitions Continued

Acquire Stock with IRA - 401K Funds



Small Business Facts

According to the Small Business Administration (SBA), small businesses in the United States:

Represent 99.7% of all employer firms,
   
Employ more than 50% of all private sector employees,
   
Pay 44% of total U.S. private payroll dollars, and
   
Have created 64% of all new jobs over the last 15 years.
   
Our laws are getting more complex than ever before.
   
60.9% of businesses have fewer than 5 employees.
   
78.6% of businesses have fewer than 10 employees.
   
89.3% of businesses have fewer than 20 employees.
   
98.2% of businesses have fewer than 100 employees.
   
68% of small businesses are taxed as individuals because they are unincorporated.
   


Selecting Corporate Directors

How to Attract Valuable Corporate Board Members

 

Why corporate directors can be valuable.

Corporate directors may have the ability to:

Refer and help develop new business clients;
   
Share their special expertise with the board and management;
Add to the confidence of those that provide credit to the firm;
   
Provide access to valuable contacts (including politicalcontacts) in the community;
   
Add to the prestige of the firm because of their reputation, status, and accomplishments;
   
Provide leadership and solid judgment, thus helping the board to make good decisions; and
   
Assist in raising capital for expansion or new projects.
   

Why would a person serve as a corporate director?

Compensation in the form of money, stock, and / or stock options;
   
The opportunity to serve others by sharing their knowledge, business experience, contacts, and overall expertise;
   
To increase their contacts for the purpose of increasing their own business; and
   
Possibly to add to their own prestige, reputation, and status in the business community.
   

What type of person makes a valuable corporate director?

•  Certified Public Accountants;
   
•  Attorneys with business / corporate experience;
   
•  Bankers (Sr. V.P. or above);
   
•  Owners of business publications;
   
•  Successful CEOs;
   
•  Experienced directors of other corporations; and
   
•  Business executives with integrity, excellent judgment, a track record of financial success, no conflicts of interest, leadership skills, and the time required to perform.
   

What do corporate directors want?

•  Directors and Officers Liability Insurance;
   
•  Access to all relevant information so they can make informed decisions; and
   
•  An Indemnification and Hold-Harmless Agreement for all liabilities.
   



Outside or Independent Directors

Outside directors or independent directors are directors of a corporation who do not have a direct or indirect material or pecuniary relationship with the firm (or anyone closely related to the firm), other than receiving a fee for serving as a director. Outside or independent directors can not be shareholders, employees, or officers of the company or any of its subsidiaries. The New York Stock Exchange and Nasdaq Exchange require that a majority of directors be independent. Non-listed corporations are not required to follow this rule, but it is generally prudent to do so.

Non-executive directors are often referred to as outside directors but there is a difference. While non-executive directors are not part of the management team, they may be shareholders of the corporation which has the effect of making them less than fully independent.

Having outside directors tends to increase the confidence of shareholders and lenders and often results in higher stock values.

If your corporation or non-profit corporation is in need of recruiting a qualified outside director or non-executive director, we may be able to assist you.




Corporate General Counsel Services

Inhouse General Counsel           •          Outside General Counsel

The General Counsel of a corporation or other legal entity is the chief attorney for the firm. The General Counsel may be a full time inhouse officer of the firm, or may be a part-time outside attorney who provides general counsel services including the following:

•  Providing legal advice regarding compliance with all laws affecting the business;
   
•  Negotiating, drafting and / or approving contracts, for use by the company;
   
•  Overseeing all areas of risk management including insurance, indemnification contracts, and settlements of disputes;
   
•  Advising on employment policies and procedures, hiring employees, terminating employment relationships, confidentiality agreements, and non-disclosure agreements;
   
•  Providing advice on how best to protect company assets including intellectual property; and
   
•  Representing the firm in mediations, arbitrations and litigation, or managing these activities for the firm.
   

Our business-corporate attorneys are available to provide part-time outside general counsel services for small and medium sized corporations and other business entities.

 

Business Startup Checklist

Following is a business startup checklist to assist in developing a new business. Not all items listed apply to every business. There may be items you will want to consider that are not listed.

ADA Compliance (Americans with Disabilities) Act Insurance - Workers' Compensation
       
Advertising Plan Job Descriptions - Written
       
Advertising Promotional Items Kitchen Supplies
       
Agent for Service of Process License - City or County
       
Alcoholic Beverage Permit License - Professional
       
Bank Account Line of Credit
       
Barter - Direct Mail Announcements
       
Barter Exchange Merchants Association
       
Budget Name of Business
       
Building Permit Neighborhood Watch
       
Business Credit Card Non Compete Agreement
       
Business Directories - Listings Obtain Federal Tax I.D. Number
       
Business / Marketing Plan Obtain Registered Agent
       
Chamber of Commerce Membership, Open House Obtain State BOE Resale Permit
       
Cleaning Service Office / Retail Lease
       
Computer Backup System Office Supplies
       
Computers, Printers Order Business Cards, Letterhead, Envelopes, Brochures
       
Confidentiality Agreement Payroll Service
       
Contracts - Standard Forms Phone Equipment - Purchase or Lease
       
Copy Machine Phone Lines
       
Coupons Policies and Procedures Manual
       
Credit Card Merchant Account Postage Machine
       
Design Business Cards, Letterhead, Envelopes, Brochure Press Release
       
Determine Advisory Board Professional Associations
       
Determine Board of Directors Purchase Inventory
       
Determine Location of Business Research - Competitors
       
Employee Handbook Safe, Cash Register
       
Employment Agreement SBA Loan
       
Equipment - Lease Scanner
       
Equipment - Purchase Security Guard - Cash Pickups
       
Establish Prices For Your Products / Services Select Accountant
       
Fax Machine Select Attorney
       
File Fictitious Business Name Statement (DBA) Select Commercial Bank
       
Financing Select Form of Business Entity - Form It
       
Fire Department Permits Security Alarm / Monitoring
       
Fixtures - Purchase Set up Accounting System, Billing System
   
Forms - Approved For Use Shareholders Agreement (Buy - Sell)
       
Franchise Compliance Checklist Sign Permits
       
Furniture - Purchase or Lease Signs
       
Grand Opening Small Claims Filing Service
       
Health Permit Start-up Capital
   
Hire Employees and / or Independent Contractors Surveillance Cameras
       
Independent Contractor Agreement Tenant Leasing Agent
       
Insurance - Directors and Officers (D&O) Trademark Registrations
       
Insurance - Health Trade Organizations
       
Insurance - Liability Train Employees
       
Insurance - Property Website Design and Construction
       
    Zoning Limitations
       
       


Accidental or Inadvertent Franchises

One of the most costly mistakes a business owner can make is to enter into a licensing or distribution agreement that turns out to have the elements of a franchise. If this happens, the business will be operating in violation of state and federal franchise laws which can result in fines of up to $10,000 per day and criminal charges. While attorneys that prepare license agreements are generally careful to omit at least one of the elements required to create a franchise, sometimes they get too close to the line. Even when an attorney prepares a bullet-proof license agreement, the business owner may modify his or her business procedures which can result in the license becoming a franchise. Due to the possibility ruinerous fines and criminal charges, most attorneys prefer to organize a business as a franchise. While it is more costly to franchise a business, the owner avoids the risk that the business will be lost as a result of government fines and criminal charges resulting from an accidental or inadvertent franchise.

 

Franchisee Associations

Franchisees can obtain substantial economic benefits from participating in a Franchisee Association consisting of independent franchisee companies. If you are a franchisee and you do not have a Franchisee Association, call us so we can assist you in organizing one. Initial consultations are offered at no cost. The California Franchise Investment Law expressly provides that franchisees have the right to join a trade association directly, indirectly, through an officer, agent, or employee.

 

International Franchise Association

The International Franchise Association or IFA is the largest franchise association in existence with a membership exceeding 1,300 franchise systems and 10,000 franchisees. We support the IFA's Mission Statement and Code of Ethics, and encourage you to visit their website.  See History of Franchising.

 

National Federation of Independent Business

The National Federation of Independent Business (NFIB), established in 1943, is a non-profit lobbying organization that concentrates its focus on the impact of state and federal legislation on businesses. The NFIB is a strong supporter of the free market system and has a political action committee called Save America's Free Enterprise Trust. The NFIB has offices in Washington D.C. And all fifty state capitals. The organization is headquartered in Nashville, Tennessee and has a membership exceeding 350,000. Their website is: NFIB.com. We are supporters of the NFIB and encourage your support.

 

Expert Witnesses and Consultants Needed

In connection with our extensive litigation practice, Michael T. Chulak & Associates regularly utilizes the services of expert witnesses and consultants. If you believe you have the knowledge, experience and overall ability to provide these services, we invite you to complete an application and return it with your current resume. Upon receipt, we will enter the information into our database for use by our litigation attorneys and support staff. Please view our websites to become familiar with our areas of practice.

 

Existing Businesses Started During The Great Depression




Areas Served:


Los Angeles County:

Acton, Agoura, Agoura Hills, Agua Dulce, Alhambra, Altadena, Arcadia, Arleta, Artesia, Avalon, Azusa, Baldwin Hills, Baldwin Park, Bassett, Bell, Bell Canyon, Bell Gardens, Bellflower, Beverly Hills, Bouquet Canyon, Box Canyon, Burbank, Calabasas, Calabasas Hills, Canoga Park, Canyon Country, Carson, Castaic, Century City, Cerritos, Chatsworth, Claremont, Commerce, Compton, Covina, Cudahy, Crystalaire, Culver City, Del Sur, Diamond Bar, Downey, Duarte, East Los Angeles, East Rancho Dominguez, El Monte, El Segundo, Encino, Firestone Park, Flintridge, Gardena, Glassell, Glassell Park, Glendale, Glendora, Granada Hills, Hacienda Heights, Hawaiian Gardens, Hansen Dam, Hawthorne, Hermosa Beach, Hidden Hills, Highland Park, Hollywood, Huntington Park, Industry, Inglewood, Irwindale, La Canada Flintridge, La Crescenta- Montrose, La Habra Heights, La Mirada, La Puente, La Verne, La Canada, Lake Hughes, Lake Los Angeles, Lake View Terrace, Lakewood, Lancaster, Lawndale, Leimert Park, Lennox, Leona Valley, Lincoln Heights, Littlerock, Lomita, Long Beach, Los Angeles, Lynwood, Malibu, Manhattan Beach, Marina Del Rey, Maywood, Mission Hills, Monrovia, Monte Nido, Montebello, Monterey Park, Mount Baldy, Mount Wilson, Newhall, North El Monte, North Hills, North Hollywood, Northridge, Norwalk, Pacoima, Palisades, Palmdale, Paramount, Pearblossom, Pico Rivera, Pomona, Quartz Hill, Rancho Dominguez, Rancho Palos Verdes, Rancho Park, Redondo Beach, Reseda, Ritter Ranch, Rolling Hills, Rolling Hills Estates, Rosemead, San Dimas, San Fernando, San Gabriel, San Marino, San Pedro, Santa Clarita, Santa Fe Springs, Santa Monica, Saratoga Hills, Saugus, Sherman Oaks, Sierra Madre, Signal Hill, South El Monte, South Gate, South Pasadena, Stevenson Ranch, Studio City, Sun Valley, Sun Village, Tarzana, Temple City, Toluca Lake, Topanga, Torrance, Tujunga, Universal City, Val Verde, Valencia, Valley Village, Van Nuys, Venice, Vernon, Walnut, Walnut Park, West Covina, West Hills, West Hollywood, West Los Angeles, West Toluca Lake, Westchester, Whittier, Wilmington, Windsor Hills, Winnetka, Woodland Hills

Ventura County:

Camarillo, Channel Islands, Faria Beach, Fillmore, Moorpark, Newbury Park, Oak Park, Oak View, Ojai, Oxnard, Port Hueneme, Santa Paula, Saticoy, Somis, Simi Valley, Thousand Oaks, Ventura (San Buenaventura), Westlake Village

Orange County:

Aliso Viejo, Anaheim, Balboa Island, Brea, Buena Park, Corona Island, Costa Mesa, Cypress, Dana Point, Foothill Ranch, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, Irvine, La Habra, La Palma, Ladera Ranch, Laguna Beach, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forrest, Los Alamitos, Mission Viejo, Newport Beach, Newport Coast, Orange, Placentia, Rossmoor, San Clemente, San Juan Capistrano, Santa Ana, Santa Ana Heights, Seal Beach, Stanton, Tustin, Tustin Foothills, Villa Park, Westminster, Yorba Linda

San Bernardino County:

Adelanto, Apple Valley, Barstow, Big Bear, Big Bear City, Chino, Chino Hills, Colton, Crestline, Fontana, Grand Terrace, Hesperia, Highland, Joshua Tree, Lake Arrowhead, Landers, Loma Linda, Montclair, Morongo Valley, Needles, Ontario, Rancho Cucamonga, Redlands, Rialto, Running Springs, San Bernardino, Twentynine Palms, Upland, Victorville, Yucaipa, Yucca Valley

Riverside County:

Anza, Banning, Beaumont, Bermuda Dunes, Blythe, Cabazon, Calimesa, Canyon Lake, Cathedral City, Cherry Valley, Coachella, Corona, Desert Hot Springs, East Blythe, East Hemet, El Cerrito, Glen Avon, Hemet, Highgrove, Home Gardens, Homeland, Idyllwild-Pine Cove, Indian Wells, Indio, La Quinta, Lake Elsinore, Lakeland Village, Lakeview, Mecca, Mira Loma, Moreno Valley, Murrieta, Murrieta Hot Springs, Norco, Nuevo, Palm Desert, Palm Springs, Pedley, Perris, Quail Valley, Rancho Mirage, Riverside, Rubidoux, San Jacinto, Sun City, Sunnyslope, Temecula, Thousand Palms, Valle Vista, Wildomar, Winchester, Woodcrest

San Luis Obispo County:

Arroyo Grande, Atascadero, Avila Beach, Baywood-Los Osos, Cambria, Cayucos, Grover Beach, Lake Nacimiento, Los Osos, Morro Bay, Nipomo, Oceano, Paso Robles, Pismo Beach, San Luis Obispo, San Miguel, San Simeon, Santa Margarita, Templeton

Kern County:

Arvin, Bakersfield, Bear Valley Springs, Boron, California City, Delano, Frazier Park, Lake Isabella, Lebec, Maricopa, McFarland, Mojave, Pine Mountain Club, Ridgecrest, Rosedale, Shafter, Taft, Tehachapi, Wasco, Wofford Heights

San Diego County:

Carlsbad, Chula Vista, Coronado, Del Mar, El Cajon, Encinitas (Cardiff-by-Sea, Leucadia, Olivenhain) Escondido, Fairbanks, Ranch, Fallbrook, Imperial Beach, Julian, La Mesa, Lake San, Lakeside, Lemon Grove, National City, Oceanside (San Luis Rey), Poway, Romona, Rancho San Diego, Rancho Santa Fe, San Diego, San Marcos, Santee, Solana Beach, Hidden Meadows, San Diego County Estates, Spring Valley, Vista

Santa Barbara County:

Ballard, Buellton, Carpinteria, Gaviota, Goleta, Guadalupe, Hollister Ranch, Hope Ranch, Isla Vista, Lompoc, Los Alamos, Los Olivos, Mission Canyon, Mission Hills, Montecito, Orcutt, Santa Barbara, Santa Maria, Santa Ynez, Solvang, Summerland, Toro Canyon

 

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