Before You Sign on the Dotted Line – Consider the Benefits and Potential Risks
Buying a franchise can be a great way to go into business and be your own boss. You can benefit from established systems, the existing reputation of the brand and the experience of the franchisor. However, franchising carries risk to the unsuspecting.
Being a franchisee can involve many different legal issues, including:
So, before you sign on to become a franchisee, it is vital you do your research and due diligence to ensure you have a good idea on what you are getting yourself into.
When you apply, or express an interest in becoming a franchisee, the franchisor is required to provide you a copy of:
Purchasing a franchise can be an exciting venture, however the documentation is long and complicated. Before you commit, all documents must be carefully scrutinised, and you should seek professional advice from a franchise lawyer to ensure you understand your responsibilities and that your interests are protected.
Our experienced franchise lawyers will provide practical and straightforward advice on the proposed franchise and any ancillary documents, such as lease and licence arrangements, to help you make an informed decision. We understand the complexities and requirements that you must appreciate and watch out for when purchasing and operating a franchise. We can pinpoint and clearly explain clauses in the franchise agreement that require your careful consideration and identify any potential risks. If the agreement requires amendment, we can assist by liaising with the franchisor to negotiate a fair agreement for you.
Do you believe you have been misled by the franchisor as to the profitability of the franchise? Or perhaps, is the franchisor accusing you of breaching the Franchise Agreement? Experience has proven to us that the franchisor is not always right.
We have acted for franchisees in all industries and for all types of franchise disputes. Our approach is to focus on your commercial needs and goals, and closely work with you to achieve a solution to your dispute in the most cost-effective way.
If there is an issue or a dispute between you and the franchisor, we can help by:
Both parties must both comply with the dispute resolution procedures set out in the franchise agreement and the Franchising Code of Conduct. We will take the time to understand your situation to help determine a resolution strategy that is right for you, while ensuring you are legally complaint.
If the franchisor is not complying with its obligations, we can assist you to enforce these obligations by firmly corresponding with the franchisor, issuing notices and injunction proceedings.
Negotiation requires preparation, timing and skill. We understand the power of effective negotiation and have helped our clients avoid costly court proceedings by negotiating favourable resolutions and settlements.
A dispute may be resolved through mediation by allowing the parties to try and reach an agreement. Generally, mediation is a pre-requisite to litigation. If mediation is unsuccessful, the next step is often litigation.
Litigation may be necessary in order to ask a court to decide who is right. If the decision to commence legal proceedings is made, you can be assured our seasoned franchise and commercial litigators will defend your position with vigour.
Whether you are considering becoming a franchisee, are already a franchisee, or facing a dispute with your franchisor, you need skilled legal advisors by your side. Our highly experienced franchise team can provide advice and assistance at every step of your franchise journey.