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LEGAL ISSUES
Due to the complex nature of franchising you should take franchise legal advice from an experienced franchise solicitor. Most franchise contracts appear to favour the franchisor so the expertise of a franchise lawyer will help analyse areas such as restrictive clauses, renewal fees and terms, and what actions to take if there is a despute between the franchisor and franchisee.
Bearing in mind that a franchise contract is long-term, the money you spend on expert franchise solicitors' advice could be one of the best investments you make.
There are various legal stages that you will have to go through before you buy a franchise business.
1. Sign a confidentiality agreement if confidential information is being provided.
2. Enter into a deposit agreement, which will require payment to be made to the franchisor. Do take care as the payment may be non-refundable.
3. Obtain a copy of the franchise agreement.
4. Obtain legal advice on the agreement.
5. Obtain legal advice on premises if franchise is premises based.
6. Sign the franchise agreement and make payment as required in the agreement
In order to become a franchisee you will have to enter into a legal agreement with the franchisor, known as the franchise agreement.
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The Franchise Agreement
In order to become a franchisee you will have to enter into a legal agreement with the franchisor, known as the franchise agreement.
'The Franchise Agreement'
A franchise agreement should achieve three fundamental objectives-
FIRST given the absence of specific franchise legislation, it should contractually bind the franchisor and the franchisee and accurately reflect the terms agreed upon.
SECOND It should seek to protect for the benefit both of the franchisor and the franchisee and the franchisors intellectual property.
THIRD It should clearly set out the rules to be observed by the parties
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