Buying A US Franchise And Living In America

Over the years the American dream has been an alluring proposition for a number of investors where the prospects of year round sun, an outdoors lifestyle and the chance to be a part of the world’s largest economy has been too tempting to resist, writes Heather Landau.

 

While obtaining a green card is not without its challenges and often requires an investment of $500,000 or more, an alternative and more suitable option could be the E-2 Investor Visa. Within six to eight weeks the visa allows the holder to establish a business in the US and while the level of investment has no clear definition, in our experience the amount required would be at least $100,000.

An increasingly popular consideration for investors who don’t want to build a new business from the ground up, is investing in a pre-existing franchise that gives you the necessary training, support and branding that can often take years to obtain.

By investing in a US franchise and taking an active role in the day-to-day management of the company, you, your spouse and any children under the age of 21 could find that the E-2 Visa may be an extremely attractive opportunity for both you and your family.

 

There are a number of requirements for choosing this route that includes:

 

- The applicant must be a national of a treaty country

- A detailed business plan describing how your franchise will be profitable

- Every franchise is supposed to employ at least two US nationals

- You have an active role in the business

 

Franchising is huge business in the US and accounts for 18 million jobs, approximately 14% of all private sector employment. The process of investing in a franchise isn’t as complicated as many think, but there are a number of steps that will need to be completed for a successful E-2 application.

 

Define Your Franchise Requirements

 

Understandably you’ll need to purchase a franchise in order to fulfil the E-2 Visa requirements, but you should also take into consideration what’s best for you, possibly your family and any lifestyle requirements you may have.

Defining what you require from the business from a number of different perspectives including your minimum salary requirements, location, your previous experience and timings will not only help with a successful application, but ensures that your life in America is exactly what you’re looking for.

 

Find A Desirable And Qualifying Franchise

 

This stage is arguably the one that takes the most time as you not only have to find available franchising opportunities, but that they’re a solid investment and a viable option.

 

Areas to consider are:

 

- Is the franchise in a declining industry? (e.g. video stores)

- The potential of the local market/audience

- That the potential revenue and earnings stated can be substantiated

 

Negotiation

 

Once you’ve found a suitable franchise you can begin the process of negotiation to find a transaction that you’re happy with.

Franchise fees are typically non-negotiable, if a company negotiates a different franchise fee with one individual, they will have to disclose this new price to all interested parties. Understandably this can delay the entire process.

There are however areas that may be open for negotiation. These could include the exclusive territory a franchise is allowed to operate within. These boundaries will vary depending on the industry, but there is often a certain amount of flexibility that may widen these territories for you.

If in doubt, it doesn’t hurt to ask what areas a franchisor would be willing to negotiate on.

 

The Transaction

 

There are a number of steps that need to be completed in order to achieve a successful transaction. It’s important that you communicate regularly with your agent or advisory team throughout the process to ensure everything runs as smoothly as possible. A quick overview of the steps would include:

 

- Due diligence

- Escrow Instructions (west coast) or Closing Attorneys (east coast)

- Business Plan

- E-2 Application Package

- Landlord Approval

- Franchisor Approval

- Transition Plan

 

If you’re working with an advisory team they should have experience and be able to assist you with the legal requirements, accounting, company formation and immigration. All of which will be necessary for a successful E-2 Visa application.

Starting a business in a new country can seem daunting, but investing in a franchise that provides continued support from the franchisor, increases your chance of success and can ultimately make your American dream a reality.

 

Heather Landau is the managing director of Immigration Into America.com, offering our clients a set of immigration services including company formation, bookkeeping, virtual offices or introductions to investment programmes that will support your immigration requirements.