BF April 2010 Issue

Sherrards
135
Contact info
Website:
www.sherrards.com
Email:
mark.machray@sherrards.com
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Phone:
020 7563 9805
classification:
Solicitor services
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especially what the consequences are to you
on a termination of the agreement should
you breach any of its terms.
Sherrards act for many franchisors
and franchisees. Whilst it can open your
eyes to what you are entering into, it is
unlikely solicitors can negotiate the terms
of the franchise agreement on your behalf.
Franchisors look for consistency throughout
their networks of franchisees. Franchisees
speak to one another; to favour one over
others can cause all sorts of resentment
and disquiet.
A close inspection
What Sherrards can do, given its
experience in the franchise sector, is advise
whether, on balance, the franchise agreement
as a whole, is fair and reasonable. This should
Why you need a solicitor for your franchise agreement,
enable you to decide whether or not to
buy that particular franchise. The franchisor/
Mark Machray explains
franchisee relationship is like any other
business relationship. There needs to be an
element of trust. Without trust there is no
S
TARTING YOUR own business is
“Taking a
so you can see what is before you. Taking a relationship, without that relationship your
of course a risky undertaking, but
franchise
franchise from a successful franchisor does business will suffer. If the franchise agreement
without those people willing to not automatically mean that your business is drafted too much in favour of a franchisor,
do so, where would we be? Entrepreneurs
from a
will succeed. It will require hard work just warning bells should ring and it is the
drive the economy creating jobs and wealth;
successful
as any other start up business will. When solicitor’s job to ring those bells. ■
they are the people with the enthusiasm and
franchisor
you sign a franchise agreement, that is it, you
ambition to inspire others. cannot simply walk away if things don’t go
To take a franchise requires all those
does not
to plan.
attributes. Whilst all the statistics show that
automatically
It is a solicitors job to spell out clearly
starting a business as a franchisee gives
mean that
exactly what obligations you are undertaking
you a far greater chance of success than when you sign that franchise agreement. Not
going it alone, it is by no means guaranteed.
your business
until you fully understand those obligations
To think otherwise would be a dangerous
will succeed”
can you begin to appraise properly whether
self-delusion. you are getting what you bargained for.
The energy and determination Above all, you need to know the ﬁ nancial
entrepreneurs have to achieve their goals is implications of entering into the franchise
infectious. One takes great pleasure in their agreement. These are not simply the cost
success, knowing one was there from the of the franchise fee and the payments due
start, and having played some small role in to the franchisor as and when you start
helping them to achieve that success. to trade, but include items such as the
But what role do solicitors play? Great advertising levy, the cost to you of having
desire, if not tempered, can be a dangerous the franchisor train your staff, ﬁ tting out
thing! The temptation for a prospective the premises as required by the franchise
franchisee, full of zest and zeal, to sign agreement, etc.
a franchise agreement in haste and get You also need to understand the
cracking can be very strong, particularly in minimum performance targets a franchisor
Author’s note
the knowledge that the franchise agreement may expect of you, and what the implications
will generally be a non-negotiable document. are if you fail to achieve these. How long the
Mark Machray is a partner at Sherrards
Solicitors working within the Company
It is a sad truth that solicitors are franchise will last, what right you will have to
Commercial department, specialising in
the party poopers, the cynics, the safe extend the period of the franchise, whether franchising.
professionals. They pull back on the reigns you have the right to sell the business, and
www.businessfranchise.com April 2010
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