Franchising

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    We provide a complete franchise service in all aspects of franchising for both new and established franchisors and franchisees.
    The term “franchising” is used to describe many different forms of business relationships. In its most familiar sense, the term “franchise” has arisen from the development of what is called “business format franchising”. This is the granting of a licence by one person (the Franchisor) to another (the Franchisee), which entitles the Franchisee to trade as their own businesses under the brand of the Franchisor, following a proven business model. The Franchisee also receives a package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a pre-determined basis. A Franchise Agreement will normally have a pre-determined agreement length, with renewal options.
    A franchise in this sense will usually entitle the Franchisor to exercise continuing quality control over the Franchisee with the Franchisee periodically making payments to the Franchisor.

    For Business – Franchisors

    As a business you may wish to set up a franchise operation if you have a successful existing business which you wish to expand.

    You should aim to form a business plan setting out the reasons for franchising, confirmation that the proposed products or services are susceptible to franchising and a breakdown of the proposed management structure and an explanation as to its appropriateness for franchising.  One of the most important aspects of this initial pilot phase will be the development of an operations manual which will regulate the terms on which a Franchisee operates the franchise business.  The operations manual will set out the day to day operation instructions to the Franchisee.

    Many Franchisees operate from retail premises.  Franchisees are often small entities with no track record and a Franchisor may have to take the Head Lease for premises and grant a Sub Lease to its Franchisees in order to satisfy the landlord’s requirements.  Property issues of this sort need to be ironed out at an early stage of the franchising process.

    The Franchise Agreement will normally contain provisions authorising the use of a brand name and other Intellectual Property (including the operations manual) and careful advice needs to be taken to ensure that your interests are properly protected and Intellectual Property safeguarded.

    For You – Franchisees

    We are often consulted by prospective Franchisees who wish to understand the obligations which will be imposed upon them in any given Franchise Agreement.  Taking a franchise often represents a good way of becoming self-employed but giving the new business instant traction.  However, many new Franchisees do not have general business or management skills and although franchising will enable them to take advantage of the Franchisor’s name and reputation, they may well require advice in connection with any relevant finance, the risks of business failure and the other obligations set out in the agreement.

    Other Considerations

    Franchising is now regulated by the Trading Schemes Act and also extensively regulated by UK Competition Law.  We can advise both Franchisors and Franchisees in connection with these areas as well as those other issues which we have already referred to above.

    Our Experience

    For Business – Acting for Franchisors

    • Advising on the establishment of franchise networks including drafting franchise agreements.
    • Amending and updating franchise agreements and franchise documentation.
    • Overseeing and managing resales between outgoing franchisees and incoming franchisees on behalf of the franchisor.
    • The enforcement of post-termination restrictive covenants against former franchisees.
    • Advising on disputes with franchisees including claims for breach of contract and misrepresentation.
    • Enforcement of franchisor’s intellectual property rights, including trade mark infringement and passing off.
    • Acting on the acquisition of UK master licence rights.
    • Defend franchisors against claims from groups of disgruntled franchisees

    For You – Acting for Franchisees

    • Fixed-fee Franchise Agreement reviews.
    • Advice on buying and selling existing franchise businesses.
    • Advice on the sale and purchase of multi-unit franchises.
    • Advising on termination of franchise agreements.
    • Advising on misrepresentation issues, claims for damages for breach of contract and negligent advice by franchisors.
    • Advising on premises acquisition and lease negotiations.
    • Defending unlawful termination of franchise agreements and subsequent litigation to contest enforcement of restrictive covenants and calculation of losses

    We offer a comprehensive franchise agreement review service for all prospective franchisees. The written report outlines the principal terms and highlighting any unusual or onerous provisions. We also offer a follow-up telephone consultation to ensure that all concerns are addressed. The service is offered for a fixed fee. For further details please contact us on 0121 268 3208.

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