Franchise Businesses 

Franchising your business

Whether you’re buying a franchise business, setting up a new franchise, or selling your franchise, we can assist you every step of the way!

The Franchising Code of Conduct outlines the rights and responsibilities of franchisors to franchisees, including particular requirements for disclosure of information, the provision of a cooling-off period, and unconscionable conduct. Only by knowing these things can you take adequate steps to set up a compliance system to protect you from defaulting under your franchise Code obligations.

Complying with the Code is mandatory. It’s enforced by the Australian Competition and Consumer Commission and the penalties for breaching the Code are quite severe.

We help business owners set up new franchise systems and comply with the requirements of the Franchising Code of Conduct including:

  • ZPreparing Franchise Agreements and Disclosure Documents
  • ZCompliance with the Code
  • ZBusiness structuring advice
  • ZCommercial Leasing
  • ZProtection of your intellectual property

Buying a franchise

If you’re buying a franchise business it’s important to understand your risks and obligations. Only by knowing these things can you enter into your franchise agreement fully understanding your obligations as a franchisee.

We can assist you by reviewing the Franchise Agreement and Disclosure Document and providing practical, expert legal advice in relation to:

  • Limitations that apply when the business is sold
  • Obligations when the agreement comes to an end
  • Ability to terminate the franchise agreement, or transfer it to another person
  • The franchisor‘s ability to compete directly with the franchisee
  • How the franchise territory is defined
  • The range and size of fees being paid to the franchisor
  • Your marketing obligations
  • Performance targets, and what happens if there is a downturn in business
  • How the guarantee clauses work

Selling a franchise

Selling a franchise is different to selling a ‘standard’ business.

Your franchisor will have an established process for selling a business within the franchise. This should be in your franchise agreement and operations manual. Although it will restrict what you can do, the process will also make the sale easier by providing clear steps to follow.

The obligations for the sale will vary by franchise. We can review the Franchise Agreement and Disclosure Document and provide practical, expert legal advice in relation to:

  • The franchisor’s first right to purchase the business
  • Approval by the franchisor of the potential buyer
  • Any assignment fee
  • The cost of training the new buyer
  • Restrictions prevent you from trading as a competitor or using the franchisor’s intellectual property after you have sold the business.

There are many legal considerations to take into account when it comes to setting up, buying or selling franchises, so it’s important to get advice from a commercial lawyer to ensure you comply with all the regulations and requirements.