Franchising is a business concept that allows a business to operate under the established brand of another business. If you are a franchisee, you can sell a product or service of the franchisor for a fixed period of time, and in return you pay the franchisor the franchise fee as agreed by you and the franchisor in the franchise agreement. In addition, you are obliged to follow the operational guidelines and other requirements as set out in the franchise agreement and franchising manuals.
Franchising may be a great alternative way to own a business, or to expand into new markets and increase market share. However, you must consider franchising carefully because franchising is a unique business model whereby you as the franchisee do not have the absolute power to control the way you manage your business; you must follow the operational standards and guidelines set out in the franchise agreement and operations manual.
In addition, both the franchisor and the franchisee must comply with the Franchising Code of Conduct and Australian Consumer Law.
Further, the franchise agreement and other documents with respect to franchising are lengthy legal documents that contain complex legal language and issues that require franchise legal experts to analyse and explain.
Tang Law can help you understand your rights and responsibilities under the franchise documents and under the relevant laws. We can also assist you to understand the risks involved when buying a franchise and provide you with a risk appraisal and risk management strategy if required.