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5 Top Tips for Budding Franchisees

Thursday 30th August 2018

Here are some top tips for all budding franchisees! If you are thinking of becoming a franchisee, you should consider these tips.

1. Make sure your contract reflects the deal.

Your contract should contain all the key details about your franchise. From the simple facts – the name – to the key points eg. your territory, fees etc. If something isn’t covered it can be quite difficult (i.e costly) and in some cases, impossible to get a franchisor to honour that deal.

2. Get a fixed fee review and report from a Bfa affiliated lawyer. lawyers that specialise in franchising vetted by the British Franchise Association).

Your franchise contract is long and will be more favourable for the franchisor. It is key you understand what you are signing. Franchises are often granted for a minimum of 5 years and (unless you sell the business) you won’t be able to get out of it early even if you don’t like it/you cant make it pay.

3. Make sure you the own the contents of your website.

Social networking is a key part of any marketing strategy. This also applies to franchises. Most businesses engage contractors to design their websites. If you do this, legally although you are paying for the work, the designer owns the content. This can cause all sorts of problems particularly when you want to sell your business.

4. Have policies in place with staff.

As a franchisee if you have staff you are responsible for their actions. If staff use customer data improperly or abuse social networking sites to damage your brand not only can the franchisor terminate your contract but, you are often financially responsible for any damage caused.

5. Get advice before competing with your Franchisor.

Successful franchising is rewarding. At that stage you may be tempted to go it alone – set up your own business and divert your custom to it. Legally this could put you in hot water (even if your contract has ended) as most franchise contracts prevent you from doing this for a limited time (up to one year).

Fiona Boswell is a Senior Associate Solicitor at Freeth Cartwright LLP and Head of FC Franchise Build, Manage, Grow, Exit ™ Unit. You can contact Fiona on 0845 070 3812 or e-mail fiona.boswell@freethcartwright.co.uk

Whilst every effort has been made to ensure the accuracy of this article, it does not provide complete coverage of the subjects referred to, and it is not a substitute for professional legal advice and should not be relied upon as such.