We are pleased to report that following the recent arrival of Amy Leite at the firm we are now able to advise franchisees on all franchise related matters.
Amy has specialised in franchise matters for several years and gives the low-down on franchises below.
A franchise is generally described as a “business in a box.” A franchisee pays a franchisor an initial fee to be granted the rights to use the franchisor’s tried and tested system, know-how, methods, trade name and trade marks to operate a business within an allocated territory.
For an ongoing weekly or monthly fee during the term of the agreement the franchisor will provide ongoing support, guidance, updates/modifications to the system and training.Examples of well known franchises include Costa, McDonalds, Chem-Ex, Green Thumb and Dyno Rod.
A franchisee will be expected to enter into an extensive franchise agreement which sets out all of the obligations and liabilities of both parties. A typical franchise agreement is 40 to 70 pages long and the terms will be heavily weighted in favour of the franchisor.
Typically, but not always:
The agreement will contain an entire agreements clause and multiple non-reliance provisions which are designed to prevent any statements, representations, warranties or documents which are not set out in the franchise agreement from being relied upon. This is particularly relevant where franchisors provide cash flow and profit forecasts before franchisees decide to enter into a franchise agreement but which are then not referred to in the agreement at all.
The key thing to do when considering buying a franchise is to take advice on the terms from a solicitor who is experienced in franchising. It is very important a franchisee is able to go into the agreement with a clear idea of their obligations and the risks.
We provide an extensive and thorough agreement review service on a fixed fee basis. Our service is praised by clients as exceeding expectations, being extensive, clear and thorough. We believe that this is because our service goes further than the norm of simply providing franchisees with a written report on the terms and stating which are standard.
If you would like to discuss the review service or obtain a fixed fee quote for the service please visit our Fixed Fee Franchise Agreement Review page.