Franchising is a complex business arrangement that tends to require a complex legal agreement to minimise the risk for both parties. SA Law can help you get it right.
Franchise agreements get their complexity from the vast range of commercial factors and situations they need to take into account.
The franchisor will have many stipulations about the use of their brand, particularly in relation to advertising and marketing. There may also be regulatory considerations that govern the way the franchise is operated. Nevertheless, franchising can be a profitable way to expand your business, without the need to raise finance for a merger or acquisition. In essence, you increase your turnover by other entities operating your own pre-approved business model.
On the other side, franchisees benefit from capitalising on a tried-and-tested model that is likely to start paying for itself quicker than getting a new brand established in a highly competitive market.
The objective for both franchisor and franchisee is a profitable and risk-free commercial relationship. Franchisors want adequate reward for giving permission for their brand to be used, and want it to be used in the same manner they use it themselves. Franchisees want to benefit from the brand’s established reputation, but also want to be free to manage their own affairs.
SA Law can help you achieve a strong commercial relationship that balances these needs, and minimises the chance of a dispute arising. We can represent you in negotiations, draft and amend franchise agreements, and regularly ‘health-check’ them to take account of economic and legislative changes.
How we help you
- Our advice is always based on a full understanding of the business model to be franchised, and the company or individual that wishes to become the franchisee. This enables us to give you the very best advice.
- Well-worded franchise agreements help to minimise the risk of disputes, but some can arise because of circumstances outside your control. If this happens, SA Law has extensive experience in resolving them quickly and cost-effectively.
It’s good to bear in mind...
- Stay in regular communication with your franchise partner, and manage their expectations if required. This will help you to avoid disputes.
- Always seek legal advice if the other party wishes to introduce changes to the franchise agreement, or you could be exposing yourself to unnecessary risk.