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You the Business > Franchising

If you are contemplating buying or taking on a new franchise it would be well worth while investing some time in paying for a Solicitor experienced in franchises. Clarkes are well placed to advise on the pros and cons of franchising, the terms of franchising agreements. Franchising can be beneficial for both franchiser and the franchisee and many risks associated with traditional start up are overcome and experienced by others. Issues relating to franchising that the inexperienced need to be wary of:-

• Restriction on areas
• Competition
• Ability to decide
• Hidden costs and payments for stationary, marketing
• Costs of assignment
• Restrictions on marketing franchise for sale
• Obligations to buy raw materials from franchiser with no price controls
• Ability to trade under the name of a recognized brand
• Business structures tried and tested and in place
• Banks may treat funding applications more favorably
• made easier and quicker routes into business
• Proven business formula to follow
• Taking advantage of a Franchise opportunity may be cheaper than buying an existing business

Matters to be aware of:-

• Rights to renew the franchise
• If the business is not profitable the franchise fees still need to be paid
• Penalties for violation of the franchise agreement can be harsh and even loss of franchise

For expert advice please contact Paul Roberts, Head of Residential Property and Partner.