In the business world, a license agreement gives permission for one party to use what belongs to another. A license agreement may exist between two individuals or two businesses. Many businesses, like small family-owned businesses, may have license agreements. A franchise agreement is a license agreement that’s specifically geared toward expanding brand awareness through expansion of a company’s products or services. Franchise agreements may be between two businesses. As with any legal agreements, the parties involved must understand the agreement’s language. Family law attorneys may see license and franchise agreements frequently in their law practices.
When you’re dealing with family-owned businesses, these types of agreements come into play as ways that families handle their businesses. Perhaps part of your family wealth comes from a successful company owned by your family. If you’re a business owner, it’s vital that you safeguard that wealth while also ensuring that family members are able to share in the wealth. Your family could be structured in any manner in which parents had children together or children did not have both parents in their upbringing. Family members often have intricate relationships with one another. These relationships are not always healthy or productive. When you fail to value your family relationships, your relationship with your family business could suffer, resulting in arguments, relationship problems and estate issues.
Even where your family gets along, legal agreements that clearly spell out your thoughts and goals could be key to preventing family disagreements over how revenue generated by a family business is to be shared among family members. By entering into an agreement with your family members, particularly where there’s a business entity in which family members invest money or time, you could save yourself a lot of future headaches in family law. Understanding the language of license and franchise agreements is one aspect of knowing how these agreements can impact family law. You’ll need to understand how this type of agreement is likely to affect you in the future, not just only today. By doing this, you could hopefully avoid decisions that could lead to litigation.
Unfortunately, families are not always able to set aside their differences. Even when a family member involved in a business is working in a respectable capacity with other family members’ knowledge and consent, disputes could still arise. When conflicts arise, families could benefit from identifying their agreements in writing, like in a license agreement or franchise agreement. This could simply involve either family members drawing up a written agreement describing who is going to do what in relation to the family business, or it could involve putting that agreement in a legal document. In either case, having the information documented in writing and signed off on by all family members who are parties to the agreement could help to mitigate disputes.
If your family is involved in a business together, understanding how a license agreement and a franchise agreement relates to your family is a key part in ensuring that the arrangement you have for doing business with one another avoids conflict in both your business and the larger family network. When you don’t understand how one or both agreements relate to your family as family members enter into them, family members could be susceptible to making business and financial decisions that could create problems for themselves and the rest of their family. Your family could be strong and highly productive, or it could be dysfunctional.
Consulting with a family law attorney who has a background in business could help you decide on the best course of action to form a business agreement with your family. Like with any other legal agreements, a family law attorney could assess your current situation along with your future goals for you and your family and advise you on the best way forward. While you may already be familiar with how a license agreement vs franchise agreement works in relation to family members, or you may have even entered into one with family members in the past, the benefit of having a free consultation with a family law attorney like Scott L. Levine could be the difference between a solid understanding of licensing and franchising agreements within your family and a failed business relationship amongst family members. Discussing the nature of your family with a family law attorney could be helpful. The attorney could advise you on the benefits of forming a legal agreement with your family members. Family members should never be involved in business with one another without consulting experienced legal counsel.
