Setting up a Franchise

Franchising provides unlimited options for imaginative lawyers experienced in this area. It allows us to design a franchising system that really suits your business, now and into the future. Although every franchise system will vary, a brief outline of the material you would expect to find in a Franchise Agreement is set out below.

Franchise documents are very comprehensive but will have to be tailored to suit your particular requirements. In particular the franchise documents will deal with:

  • Granting a licence to the franchisee to operate under your trade name, logo and business system
  • Trade mark protection
  • Payment of initial fees and providing for royalties to be paid on a weekly or monthly basis
  • Dissemination and distribution of information, business systems, computer systems and information technology by you to your franchisees
  • Confidentiality agreements whereby they agree to respect YOUR confidential information and agree to return all copies of the software and manuals to you at the end of the franchise
  • If you are going to have exclusive territories, catering for this in the franchise system
  • Use of centralised phone numbers, for example 1300 numbers, and how this is to be passed on to franchisees
  • Preparation of a manual and distribution of same to franchisees together with a covenant to return it at the end
  • Provision of continuing advice by you to support the franchisees
  • Centralised advertising program and contribution arrangements from franchisees
  • Registration of business name and reconveyance upon completion
  • Dispute resolution procedures as required the Franchising Code of Conduct
  • An option, as is usual, for the Franchisor to acquire the business, or for it to be transferred to a nominee, in the event of termination or proposed sale by the franchisee – although this may not be appropriate in every case

We go to great lengths to ensure that the ownership of the business reverts to you as the Franchisor at the end of the Franchise. Tools in this endeavour include an effective restraint of trade against the franchisee, and requirements for franchisees to provide information about customers’, phone numbers and contact details. Ideally we try to provide for a seamless transition, in the event of abandonment by a franchisee or their removal. We also provide for the transfer of any business names and web sites to you as Franchisor at completion.

You can have exclusive supply arrangements directly with your franchisees that permit you to make a reasonable commercial mark up on the product you are selling to them. Often ACCC exemptions are required, and we can help obtain these for you.

In addition to the franchise agreement you will also need to prepare a disclosure document. This is the information required by statute which is provided to each franchisee before entering into the agreement. Each franchisee will have a seven day cooling off period after signing the franchise terminate if they are not happy with the proposal.

We can help you with preparation of manuals which will deal with such issues as:

  • Business premises selection
  • Preparation and presentation
  • Use of logos, trade marks and colours
  • Presentation of staff including uniforms, methods of greeting customers, methods of doing the work and various quality control check lists. The manual is central to providing value to your franchisees

These and many other legal issues will be dealt with in setting up your Franchise.

Please call Peter Lee on 3329 3999 or email peter@plee.com.au if you have any enquiries.

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