Taking on a franchise is a serious investment and involves taking on substantial obligations and liabilities, often for a long time. It is vital that you receive detailed advice on these obligations and liabilities, which are often onerous on the franchisee so that you understand what you are signing up for. Even if the franchisor is not prepared to agree to any amendments, we can take the stress away from a confusing process and ensure you are prepared for what lies ahead.
We can advise and assist you on the terms of your franchise agreement, whether you are an experienced franchisee who runs multiple franchises, or you are embarking on a franchise business venture for the first time. We are experienced in reviewing a wide variety of franchise agreements, from relatively small and newly-formed franchises to established and renowned national and international high street chains.
We regularly review and report on franchise agreements for prospective franchisees, both from a legal perspective and an ethical perspective with reference to the British Franchise Association’s Code of Conduct.
By drawing on our wider commercial experience, we can advise and assist with company formation, shareholders or partnership agreements and personal guarantees that individuals may be required to provide upon entering into a franchise agreement. For more information on these corporate services please see here.
We know that things may not always work out and if you do find yourself in dispute with your franchisor or require advice and assistance with terminating your franchise agreement, our dispute resolution team has a wealth of experience in acting for franchisees with such matters. For further information on our dispute resolution services please see here.
- Reviewing and Reporting on Franchise Agreements – We review and report on the terms within franchise agreements. We have undertaken reviews in respect of franchises in various sectors including Green Thumb Franchise, the sale on the installation of shutters, franchises of food and beverage outlets including coffee shops and take away outlets, home cleaning franchises;
- Assisting franchisees with the termination of their franchise agreements and the implications and application of post-termination restrictions.
FAQs for Franchisees
What are the advantages of operating as a franchisee?
- Research suggests that as many as 50% of franchisees would not otherwise become self-employed were it not for the franchise format;
- Franchisees do not have to have general business or management skills (or indeed specialised knowledge) in the proposed business activity;
- By taking advantage of the franchisor’s name and reputation, the lead time in making a business successful can be reduced, which in turn can reduce the franchisee’s working capital requirements;
- Finance may be more readily available to franchisees than those setting up in business on their own account;
- The risks of business failure can be substantially reduced;
- The franchisee can make use of the franchisor’s purchasing power and there may be other benefits relating to the size of the franchisor’s operation;
- The franchisor undertakes national advertising for the benefit of the franchisee.
What are the disadvantages of operating as a franchise?
- A franchisee is subject to substantial control from the franchisor. No restrictions would, in theory at least, be placed on the franchisee were they to set up in business independently;
- A franchisee will have to pay royalties and/or a mark-up on the goods or services which they receive from the franchisor or their nominated supplier;
- There may be restrictions on the franchisee’s ability to sell the franchised business or to pass it on to a relative;
- The franchisee’s operation will be directly affected by the actions or insolvency of the franchisor.
Are there any employment considerations I should be thinking about?
Depending on the nature of your franchise, you may be required to employ staff to assist in the provision of services and/or operation of your franchise.
Our Employment Team is on hand to provide advice and assistance and draft any contracts of employment, employment handbooks, policies and procedures that you may require to ensure the smooth operation of your franchise. For more information see our Employment page.
How should I obtain premises for my franchised business?
If your franchise requires you to operate from commercial premises, you may be required to source your own property or take a sublease from the Franchisor. Our dedicated Commercial Property Team can advise on your franchise venture’s most appropriate property strategies. For more information see our commercial property pages.
Meet Our Specialists
Home-grown or recruited from national, regional or City firms. Our specialists are experts in their fields and respected by their peers.
Carla is a Partner and Head of our Commercial Team
Andrew is a Partner in our Corporate Commercial Team
Richard is a Senior Associate in our Commercial Team
Joanna is a Solicitor in our Commercial Team
Olivia is a Trainee Solicitor within our Commercial Team
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