Buying a Franchise in Sydney

What is a Disclosure Statement?

The disclosure statement will outline the important details about the franchisor and the history of the franchise itself. It will include information about the business experience of the franchisor, a list of franchisees and their contact details, a list of former franchisees, marketing details, marketing fund, financial statement for the two previous years, and a statement of the franchisor’s solvency.

Our experienced franchise lawyer in Sydney can explain this disclosure statement and guide you on how it will affect your business.

What is a franchise agreement?

The Franchise agreement sets out the relationship between the franchisee and franchisor. It sets out the rights and obligations of both parties in the relationship. Most franchise agreement tends to favour the franchisor as the franchisor’s legal team usually drafts them.

You should have your franchise agreement reviewed by an experienced lawyer who can point out important clauses to you. We may also recommend that amendments be made to the agreement. Often, the franchisor will agree to these changes.

Our experience means that we know which questions to ask to ensure that you are not entering into an unfair agreement. We will also advise you on what you can expect out of the agreement and how it will affect the everyday running of your business.

We will provide you with straightforward and easy to understand advice that takes the complication out of entering a franchise agreement. We will equip you with the knowledge that you need to make an informed decision about purchasing a franchise.

Lease or premises Licence Agreement- What is the Difference?

Franchises often operate out of fixed premises. You may enter into a lease directly with the landlord. This is known as a lease. In some cases, the franchisor will enter into the lease with the landlord, and then you will lease the premises from the landlord. This is known as a Premises Licence Agreement.

If you enter into a lease, you have more control, however, you will also be responsible for the premises. If you enter into a Premises Licence Agreement, the franchisor will have this control. However, if you maintain a good relationship with the franchisor, this should not be an issue.

Legal Advice - is it necessary? Benefits versus Risk

One of the advantages of purchasing a franchise is that, in most cases, the system it runs by has been tried and tested over years. Franchises will have a specific way of doing business, a marketing plan and marketing budget that is used to benefit the franchise. What must be noted is that buying a franchise involves complicated documentation. You will also be making a significant monetary investment. For these reasons, it is important that you seek legal advice from a qualified lawyer. At PCL Lawyers, our lawyers in Sydney are qualified across different practice areas such as commercial law, consumer law, property law and employment law. Their vast knowledge means that they can pinpoint all the relevant legal issues of which you should be aware.

How can we help with your franchise purchase?

Firstly, we can provide you with the legal advice necessary to make an informed decision. We will provide you with advice on:

• Franchise Purchase
• Pre-Purchase Due Diligence

At PCL Lawyers, we pride ourselves on providing well-rounded legal advice. We will advise you on business structure and notify you of important clauses in your Franchise Agreement, Lease, Premises Licence Agreement or Sublease.

Disputes with Franchisors

Although you may try to uphold your end of franchise agreement, the same cannot be said for all parties involved. Sometimes disputes will occur and you will have to seek resolutions. Early intervention is key. As soon as a dispute arises, it is important to address it.

You should seek legal advice from PCL Lawyers as soon as possible to find out where you legally stand. At this stage, we will provide you with options on how to proceed. We will usually begin by sending correspondence to the other party to advise them of the situation and to suggest a resolution or mediation. During mediation, the disputing parties will come together to reconcile their differences.

We can attend mediation on your behalf.

If mediation is unsuccessful, litigation is the next logical step.

Franchise Litigation

In some cases, we will have to resort to litigation. If alternative dispute litigation has failed, then we will have to take a more formal approach. If you decide to commence proceedings against the franchisor, our experienced commercial litigators in Sydney will vigorously defend your position.

What if my franchisor has accused me of breaching the franchise agreement?

If you have been accused of breaching your franchise agreement, then you should seek legal advice immediately. We can advise you on whether you have breached your agreement and can provide you with options for proceeding.

Just because your franchisor has accused you of breaching the agreement, it does not mean you actually have. Our franchise lawyers in Sydney can help you to negotiate and come to a resolution in a fast and cost-effective manner.

Selling your franchise?

If you have decided to sell your franchise, then you will need to seek legal advice.

When you enter into a franchise agreement, it will include clauses, which will usually, require you to seek consent form the franchisor prior to selling the business. We can guide you through this process.

Our business sale lawyers in Sydney can prepare the contract of sale, assignment of lease and manage settlement of the sale.