Franchises

Any one of the three business structures described above can be adopted to carry on a franchise business. Franchise agreements are contracts whereby the owners of a business name, business ‘system’, trademark or other ‘unique selling proposition’ (the franchisor) grants you, as franchisee, the right to use that device and to ‘buy into’ that brand.

Advantages

By copying the design of the franchisors’ premises, and working to their tried and tested formula, you can gain from the experience and goodwill they have amassed. Additionally, the most successful franchises (e.g. ‘McDonalds’ in the United States, ‘Perfect Pizza’ or ‘The Body Shop’) usually provide training, business guidance and national advertising for the benefit of their franchisees. In return for this, you would typically pay royalties on your sales, and purchase at least part of your stock from the franchisor or associated businesses.

Disadvantages

Although many franchisees have prospered from the dynamism, organisation and marketing of their franchisors, as always you must take heed of the rule that risk is commensurate with reward. There can be very high entry costs for the best known and most successful franchises, whilst the growth of franchising has inevitably allowed the existence of poorly organised and structured franchises. As a franchisee you remain an independent trader and will be greatly reliant upon your franchisor. You should carefully consider the business opportunities involved and take professional advice on the terms of the franchise agreement before you sign.

Our services

When you wish to ‘buy in’ to a franchise you are almost inevitably given a package of legal documents that are presented to you as a fait accomplit that cannot be negotiated. This is rarely the true situation, and any prudent franchisee will take detailed legal advice on what he is being asked to sign, and what can be successfully ‘negotiated out’. We have long experience of franchise agreements and the negotiations that accompany them, and for a surprisingly reasonable fee we can ensure that the whole process is concluded swiftly and on reasonable terms.