FRANCHISE ADVICE
T
here is a buzz around franchising and it is easy to get carried away with the excitement without carrying
out simple checks to protect you and your investment. So what can you do?
Ÿ First of all take an objective look at your skill sets and personality – what do you enjoy? What are you good at? Although you will be trained in the franchisor’s business procedures, you will still need to have that energy to keep motivated and build a sustainable and profi table business.
Ÿ Ask yourself if the franchise business has longevity or is it likely to be overtaken by changes in technology or be just a passing fad? A good tip is to obtain an objective view from friends and family.
Ÿ Ask: how rigorous is the franchisor in its recruitment processes … does it seem thorough and discerning, or feel too eager to sign you up and take your money?
Ÿ Find out: is the franchisor a member of the British Franchise Association (and if not, why not?)
Ÿ Request a list of franchisees to talk to about their experiences, and check that it is not merely a list of the best-performing franchisees.
Ÿ Don’t stretch yourself fi nancially, prepare a proper business plan and allow for contingencies.
Ÿ Don’t sign anything without reading it through properly and ensuring that you understand what you are signing and have taken proper advice.
Finally, review the franchise agreement. Don’t ignore the opportunity to take legal advice – even for well-established brands. Just because other franchisees have signed the agreement, or the
‘‘Anything that has been agreed needs to be made in writing as a formal change to the fra nchise agreement for every one’s protection’’
franchisor won’t change it, doesn’t mean that you should sign it without taking advice for your particular situation and appetite for risk. You don’t know, for instance, that there hasn’t been changes to the franchise agreement, one which everyone else has supposedly signed. No ethical franchisor should pressurise you into signing the agreement.
Why it’s important to seek franchise-specialist advice and expertise Buying a franchise is a life-changing decision and requires commitment to the business for the duration of the term, which can be fi ve years or more. If it doesn’t work out, it’s not simply a case of walking away and writing off your investment, as you will have broken your agreement with the franchisor. You should be alert to the franchisor
telling you that certain terms are not enforced, or agreeing separate deals. Anything that has been agreed needs to be made in writing as a formal change to the franchise agreement for everyone’s protection. Remember, the brand may change hands and the franchise manager may move on, so getting things right at the start is important. Having said that, you are investing
in a uniform operating model, so you shouldn’t expect to make changes to the
franchise agreement unless these are to address specifi c personal circumstances, or errors or inconsistencies. A lawyer experienced in franchising will be able to review the franchise agreement for you in a cost-effective way. By reading the agreement, they can tell whether it is well-drafted, rather than copied from the internet or other agreements, and whether the franchisor has taken time to articulate how the franchise is to be run. Importantly, the lawyer will also
look for clauses that provide you with a certain amount of protection, as well as advise you on your personal liability (even if you set up a company). They will also ensure that you understand what it means for you and your future and answer any questions you may have. At TLT, for instance, we are
accustomed to pushing the boundaries with new ways of working and thinking. As a full service law fi rm, we provide commercial legal advice for major international franchise expansion work and high-profi le national franchises. We’ve grown rapidly and are privileged to support some of the UK’s major institutions, high-growth businesses and well-known brands. The fi rm has a UK-wide presence with
over 100 partners and around 1000 staff. We have a dedicated transformation agenda including a Future Law initiative designed to drive change more rapidly in the way we deliver legal services and products to our clients. The initiative focuses on developing new solutions to client challenges in areas like LegalTech and near-legal consulting, making us a law fi rm fi t for the future. l
PAULINE COWIE IS A PARTNER AT TLT LLP T:0333 006 1443 E:
pauline.cowie@
tltsolicitors.com W:
https://www.tltsolicitors.com
BUSINESSFRANCHISE.COM 27
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