We can assist Franchisees with the legalities and processes they must comply with so they can get on and run their franchise.
Buying or selling a franchise
Buying A Franchise
If you’re buying a new business, including a franchise, it’s important to understand your risks and obligations. Only by knowing these things can you take adequate steps to set up a compliance system to protect you from defaulting under your franchise agreement.
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 providing 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 preventing you from trading as a competitor or using the franchisor’s intellectual property after you have sold the business.
Thinking about franchising your business but don’t know where to start? The best place to start is to book a LEGAL STRATEGY SESSION with one of our experienced franchise law experts.
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