Please join Thrift & McLemore at the National Automotive Finance Association’s 23rd Annual Non-Prime Auto Financing Conference

The National Automotive Finance Association’s 23rd Annual Non-Prime Auto Financing Conference will be held June 5 – June 7, 2019, at the Renaissance Dallas Plano Square.  This event is recognized as the premier non-prime auto financing conference. Program content is developed by the Association’s board and member companies, assuring relevant and timely topics. In addition to comprehensive programming developed for the auto financing community, this year’s program will again include sessions of general interest to all participants in the industry. Finance company and bank representatives at all organizational levels and auto dealer principals are encouraged to attend.

Statutory Close Corporations in Georgia – What are they good for anyway?

In creating a legal entity in Georgia, one would be understandably confused at the many possible variations in structure that are available to him or her. For validation, look no further than the numerous forms that a Corporation can take on. Many avoid a corporation because they feel that the formalities involved are too cumbersome, that this type of organization is reserved for the fortune 500 companies that trade daily on Wall Street. While part of this assumption is true, the other part is that many small businesses do not need avail themselves of the corporate form due to the perceived formalities that come with it.

Lawyer Atlanta GA

Enter the Statutory Close Corporation. Created pursuant to O.C.G.A. § 14-2-902, the Statutory Close Corporation is a corporation with fewer than 50 shareholders that includes a statement in its articles of incorporation that it elects to be a statutory close corporation. This corporate form introduces an element of “simplicity” that would benefit a smaller organization as compared to its fortune 500 counterparts.

By adopting the close corporate form, sole proprietors and partners who wish for the benefits and protections of a corporation can do so without all of the formality that comes with it. For example, a close corporation, at its election, can do away with the creation and maintenance of a Board of Directors. Many small organizations with ownership split among a select few will have no need for a formalized board, because they as owners are acting de facto in that capacity already. Additionally, with no uninterested shareholders to appease through quarterly meetings, there is no need to conduct an annual shareholders meeting and record meeting minutes, which come at a cost.

The close corporation also tends to streamline efficiencies and decision rights for the small operator. One of these efficiencies comes in the form of a simple “right of first refusal” requirement between shareholders. While a traditional corporate form is susceptible to proxy voting and corporate takeovers, when discord occurs within a close corporation, shareholders have the option to simply buy one another out. This can all vary when involving disparate ownership and limiting agreements, but holistically, this promotes business continuity within the corporation.

A Statutory Close Corporation is not the only option either, as there are competing corporate forms that provide similar benefits, such as the Limited Liability Company. It may seem that a corporation is an overly formal entity that has no place in small business, but it is possible to take advantage of the corporate form without the complexity and cost that comes along with it.

If you are looking into corporate formation in Georgia and find yourself intimidated by the many options available, reach out to us today! Thrift & McLemore’s attorneys can help you make an informed decision about the best corporate form for your new Georgia business. Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150.

Purchasing a Franchise in Georgia as a Career Change

We recently stated on our blog that 1 in 7 businesses in the U.S. operate as a franchise.  It makes sense, as anyone with a healthy amount of working capital can purchase an interest in a turnkey operation and simultaneously become their own boss.  Also recently, Forbes published an article titled, “Laid off, Why Now Could be the Best Time to Franchise.”  It offered a fresh take on what is surely a devastating time in anyone’s life, and suggested an opportunity to spurn working for someone else, and go into the business of yourself.

 

While I would caution anyone who recently lost their job against haphazardly disregarding the years spent advancing in their given field, and honing the specific skill sets acquired, the article does present the reader with some compelling points for evaluation.  What was the level of satisfaction with the prior career?  What is the reader’s age and/or opportunities for continued advancement?  Will employment be easy to obtain, or was the layoff a product of a larger industry shift?

While the article focused on the finer points in franchise ownership, before committing to a newfound career in franchise operations, it is important to evaluate all factors to ensure that this will be a good fit.  The would-be franchisor must first assess things critically, such as their financial position, business acumen and skillset, business and personal goals, and the type of franchise that would do well in the local marketplace.

The first, and arguably most defining factor involved is the franchisee’s access to capital.  All franchises carry an initial franchise fee.  This is how the franchisor makes money, and is typically in addition to royalties on continued financial success.  Without access to this capital, which can typically run up to $1,000,000 for the most established franchise models, the would be franchisee will not be able to make it past the application phase

The second factor involves the skillset and goals of the individual purchasing the franchise.  Perhaps you are an accountant, and possess the business knowledge to keep the entity profitable, but you hate the smell of fast food.  Similarly, if you are allergic to animals then a pet sitting franchise may not be in your best interest.  Luckily, there are resources designed to match potential owners with available franchises that provide the best fit.

The final factor, and arguably the most important of them all, is the preparation and execution of purchasing a franchise.  The purchase of a franchise is a detail intensive process with many agreements and legally binding documents.  It requires a complete understanding of the Franchise Disclosure Document (FDD) and the Franchise Agreement with the entity you will be franchising with.  While Franchises are regulated under Federal law, there are differences from state to state, with Georgia being no different.

If you are considering a career change into franchise operations, and would like help understanding the critical elements of the process, please reach out to us.  Thrift & McLemore’s attorneys will assist you in every phase of the agreement, and provide critical reviews along the way.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150 to discuss how we can help you today!

Franchise Basics in Georgia

Most individuals dream of one day being their own boss, but find themselves intimidated by the prospect of quitting their day job.  Contrary to popular belief, one does not need a revolutionary idea like Jeff Bezos with Amazon or Elon Musk with Tesla to retire that old nine to five.  Franchising offers a type of entrepreneurial opportunity that tens of thousands of American’s utilize to quit their day jobs and own their own business.  Introduction to Franchise Basics in Georgia.

One in seven businesses operating in the U.S. today incorporate some form of franchise.  It is a business model that allows those without revolutionary ideas operate under the support of a corporate banner while simultaneously calling the shots and being in business for themselves.

The most common type of franchise is business format franchising, where in return for operating in conformity to rules laid out in a Franchise Agreement by a corporate franchiser, the franchisee or small business owner, is provided a full range of services and support by the corporation to offer them the best shot at maintaining a successful business.

The business model is simple.  The corporation (franchiser), lends the expertise of their successful and established business practice to a would be entrepreneur (franchisee) for a fee or royalty on the profits.  Both have a stake in the success of the business venture, so both work together to turn a profit.  This works too, as statistics show that licensees of franchises are more successful on average than those starting a business in the same industry by themselves.

Because franchising has become big business, there are regulations in place to govern the relationship.  Georgia residents should know that the state is not a franchise regulation state, meaning there is no fee or paperwork to file with the Georgia Secretary of State.  The Federal Franchise Rule and the Georgia Franchise Act, however, still govern rules in the state.

The Federal Franchise Rule is a regulation governing the relationship between a franchisor and a franchisee.  Written in very friendly terms to the franchisee, it takes into account that this individual is a far less sophisticated than the large corporation they are doing business with.  The rule writes in protections for deceptive practices and aims to facilitate informed decisions through mandatory disclosures.

One such document driving these disclosures is the Federal Disclosure Document (FDD).  This document requires franchisors to disclose to the franchisee at least 14 days before the sale, information needed to make an educated decision on the purchase.  This document includes a wealth of information, but most importantly outlines the start-up costs needed to support the business, as well as empirical data showing realistically what the franchisee can expect to earn from the venture.  These documents can run up to 200 pages, so it is important to be thorough and know fully the agreement that entered into.

Another document required by the Federal Franchise Rule is the actual Franchise Agreement itself.  This is the contract between the two would be partners that details the actual operational agreement.  It will include provisions that both parties understand the elements of the FDD, material terms of who owns what assets and the extent of the licensing agreement, as well as the length of the agreement.  As with any other contract, this governs the operation of the business, so it is best to leave the negotiations to attorneys with experience in evaluating Franchise Agreements so that they can negotiate substantive changes to protect your interests.

As stated above, while there is no requirement for franchises to register or file FDD documents in the state, there still exists the Georgia Franchise Act.  This act, while less expansive than the federal rule, defines what businesses qualify as a franchise in the state, as well as several terms important to franchise relationships such as franchise fee, franchisor, sub franchisor, etc.  The act also controls how actions such as transfer, termination, and renewal occur within the state.

Franchising in the state of Georgia offers a promising business opportunity, but can also become extremely complex.  If you are working towards the purchase of a franchise, or simply have questions about the process, give us a call!  Thrift & McLemore’s attorneys are well versed in drafting franchising agreements as well as post agreement support as you get your Georgia franchise off the ground.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150 to discuss how we can help you today!

Is the RV Industry Headed for a Slowdown?

There is a little known fact about the RV sector that the rest of America should pay heed to. The RV industry has long been an economic barometer of sorts, providing a leading indicator of the direction of the economy as a whole.   “R.V.’s have always preceded the rest of the economy in a downturn and in an upturn,” said Richard Curtin, an economist at the University of Michigan.  Many members of this industry are currently watching this trend as they see RV sales starting to level off.

Lawyer Atlanta GA

RV industry shipments aim to hit 539,900 through the end of 2018, in what would mark 9 straight years of growth.  This is a 7% increase over 2017 which tallied 504,600, and still less than the 550,000 forecasted for 2019.  Shipments year over year through Q1 saw a 13.4% lift.  These figures were provided by Frank Hugelmeyer, President of the RV Industry Association, to the association back in June.

Mr. Hugelmeyer has a lot to be optimistic about with the aging population, which tend to be the bread and butter of the RV industry, as well as outsized interest from the millennial age group, who are entering their generational period of extra discretionary income.  This all seems to align with the fact that since 2010, when the sector was emerging from the financial crisis, the RV industry has grown at an annual average of 12.6%.

Not everyone, however, shares Mr. Hugelmeyer’s glass half-full interpretation.  The city of Elkhart, Indiana, self-dubbed the “RV Capital of the World” is responsible for the production of more than 80 percent of Recreational vehicles sold in the U.S.  Many in the industry here are getting a different sense of the headwinds that propel this little corner of the economy.

While overall RV shipments were up for July, motor home shipments were down 6.5% in the same month.  Richard Curtin sees this as a “yellow light”.  Mr. Curtin acknowledges this could be a temporary condition such as excess inventory due to overproduction involving a nearly 10 year boom.  While not a significant cause for concern yet, there are other future looking indicators to be considered as opposed to historic sales.

Elkhart enjoys some of the lowest unemployment rates in the country, at just over 2%.  Despite this, recently some companies there have been cutting their production workers to four day work weeks instead of five to alleviate some of the excess inventory.

Others point not to the temporary labor glut, but the larger factors that could be contributing to these headwinds.  The RV industry, like many other manufacturing and farming communities are hit first and hardest by the impacts of the trade tariffs.  Cost of goods for many in the industry are seeing increases of up to 50%.  These costs ultimately pass through to the consumer, and many blame the rising prices for the levelling off in shipments.

Senator Joe Donelly, A Democrat whose home is near Elkhart says, “I think there’s serious concern about the effects of tariffs on the R.V. industry.  So many of the components that go into R.V.s are directly affected by these tariffs.  Echoing these sentiments is Mark Dobson, the head of the Economic Development Corporation in Elkhart County, “Nobody’s in a panic, they are just concerned.”

Still, where some fear a downturn, others are thriving.  LCI industries, a large manufacturer of components for RV’s are experiencing growth in growing sectors.  CEO Jason Lippert is optimistic.  His company saw aftermarket component sales rise by more than half in the second quarter, signaling a move to RV maintenance as opposed to new purchases.  Dan Holtz, a small business owner in the industry welcomes a perceived slowdown, as he has said he is having trouble finding enough workers and sees it as nothing more than an expected correction.

While no one in the industry has hit the brakes just yet, some are starting to take their foot off the accelerator.  While Mr. Curtin believes conditions metaphorically display a yellow light, he concludes that, “Depending on how things evolve in six months, it could be a red light, getting to the end of the expansion.”  Every business owner in the RV industry concerned about the slowdown being experienced within the sector should retain qualified counsel to represent their interests.

Thrift & McLemore’s attorneys have over 12 years’ experience in representing clients in the RV space.   Contact Thrift & McLemore by email at [email protected] or by phone at 678-671-4031 to discuss how we can assist you with protecting your RV business today.

Porsche’s Airport Hotel Is Pampering Dogs with Dinner and Drinks (Credit: Eater Atlanta)

Solis Two Porsche Drive hotel and Apron restaurant are going the extra mile with their menu offerings for dogs flying the friendly skies

Porsche’s posh Solis Two Porsche Drive hotel located at Hartsfield-Jackson International Airport now offers “Sit, Stay, Solis” for guests traveling with their dogs. The Porsche Experience Center hotel provides an in-room dog bed, a dedicated dinner menu, and even a happy hour for dogs at Apron restaurant.

Upon check-in, guests traveling with their dogs will receive a dog bed, crate, and food and water bowls to keep their canines comfortable in their hotel rooms. Owners can then take their pups down to Apron’s dog-friendly patio for a special menu developed by executive chef Derrick Green with treats, ice cream, and “pupsicles.”

Once a month, Apron is hosting “Puptails on the Pawtio” where dogs are treated to grooming and training sessions while their owners listen to guest speakers and attend book signings. On-site adoptions days are also in the works. The next dog adoption day is scheduled for Saturday, August 18 with Lifeline Animal Project.

A $75 non-refundable pet fee is required upon check-in at the hotel. There is no weight limit for dogs staying at Solis Two Porsche Drive. Sorry, only two pets per room.

https://atlanta.eater.com/2018/7/23/17602122/two-solis-porsche-drive-dog-friendly-menu-atlanta

This Year’s Atlanta Metro Export Challenge to Launch With July 18 Event

The Atlanta Metro Export Challenge, which has distributed hundreds of thousands of dollars since 2016 to help local exporters with their global sales journeys, is returning again this year with backing from JPMorgan Chase

Administered by the Metro Atlanta Chamber but open to firms from the 29-county region, the challenge will hold an information session and kickoff meeting at the NanoLumens office in Peachtree Corners at 4 p.m. July 18. 

There, potential participants will hear about how the challenge has helped companies hone their strategies and receive the financial boost needed to enhance existing sales or jumpstart international growth. 

And this recap won’t just be coming from the organizers: previous winners from the last two years will be on hand to provide their first hand testimonials about the experience. 

Many have said that the challenge — and the broader thinking it fosters — has catapulted their companies into positive new territory. 

One example is Triatek, which won last year’s pitch competition to the tune of $20,000 — and that was after the first-round victory that saw the maker of ventilation systems for hospitals and research labs take home $5,000. 

Triatek was bought by Johnson Controls Inc.  shortly after its export-challenge victory, and company leaders say having a global footprint, a process accelerated by the challenge, contributed substantially to its being seen as a promising acquisition target. 

Cars 360, another export-challenge winner with app used to take 360-degree photo for car sales listings, was acquired by Carvana, the company seeking disrupt the car dealership process through technology and simplicity. 

For interested companies, here’s how the process works: Companies apply for a grant by outlining practical plans on how they would use $5,000 to generate more export sales. Thirty will be selected as first-round winners, receiving reimbursements for expenses in sums up to that amount. Then, those winners will be invited back later in the year for a pitch competition for the possibility of winning an additional $5,000, $10,000, or $20,000. 

Start the application process here, and register for the informational event here

Editor’s note: Global Atlanta is an organizing partner of some Atlanta Metro Export Challenge events.

Autonomous vehicles bill nearing final passage in GA General Assembly

Dave Williams
Staff Writer
Atlanta Business Chronicle

Legislation setting a legal framework for autonomous vehicles to hit the highways in Georgia is just a step away from final passage.

The Georgia House of Representatives passed a House substitute to Senate Bill 219 Friday 151-17. Since the measure’s Senate supporters were at the table when the House substitute was crafted, senators simply need to agree to it to send that final version to Gov. Nathan Deal for his signature.

The bill exempts self-driving vehicles from the licensing requirements that apply under state law to human drivers. However, in light of the still-developing technology involved in putting autonomous vehicles on public highways, the legislation also mandates more expensive insurance requirements for driverless vehicles than the minimum liability insurance premiums required of traditional autos.

“This bill creates a legal structure that makes it very clear where legal responsibility lies if something goes wrong,” said Rep. Ed Setzler, R-Acworth, chairman of the House Science and Technology Committee and one of the bill’s co-sponsors.

The legislation met some resistance from lawmakers who don’t trust driverless vehicle technology.

“Whenever you operate a machine, there has to be an operator to make sure it doesn’t do what you don’t want it to,” said Rep. Dave Belton, R-Buckhead.

But Rep. Trey Kelley, R-Cedartown, the bill’s chief sponsor, said driverless cars are safer than vehicles driven by people increasingly distracted by cellphones.

“I’m convinced the technology has sufficient safeguards in place,” he said. “This technology will help reduce traffic deaths in Georgia.”

Belton also argued driverless vehicles would take jobs from 3.5 million Americans in the trucking industry.

But Rep. Kevin Tanner, R-Dawsonville, chairman of the House Transportation Committee, said Georgia can’t afford to be left behind by other states in taking advantage of the job-creating potential represented by autonomous vehicles.

“Florida, Michigan, California and so many other states have already passed laws allowing this technology,” he said. “This is the future. The future is today.”

Automotive News – Mercedes dealers get relief on renovations

Mercedes dealers get relief on renovations

10-year buffer aimed at easing tensions over Autohaus standards

A pledge by Mercedes-Benz to give U.S. dealers a 10-year moratorium on making facility changes is unusual.

Mercedes-Benz dealers, once they’ve updated their stores to the brand’s second-generation Autohaus image standards, won’t be required to make more changes to their dealerships until January 2024 at the earliest.

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