MARSH & MA­HER RICH­MOND BEN­NI­SON:

MORE THAN JUST LE­GAL AD­VICE

Business Franchisor - - COVER STORY: MARSH & MAHER RICHMOND BENNISON -

ROBERT TOTH, PART­NER AT MARSH & MA­HER RICH­MOND BEN­NI­SON (MMRB), IS A FRAN­CHIS­ING LE­GAL SPE­CIAL­IST AND AN AC­CRED­ITED BUSI­NESS LAW SPE­CIAL­IST WITH A WEALTH OF EX­PER­TISE.

It’s been quite a jour­ney for Robert over the past four decades – from work­ing in crim­i­nal law and vis­it­ing clients in Pen­tridge prison, to a gen­eral prac­tice in St Kilda for sev­eral years and then es­tab­lish­ing his own firm, Toth & Co, in El­stern­wick in 1987.

EARLY DAYS – TED’S TRAIN­ING

Be­fore and dur­ing his le­gal stud­ies, Robert worked with his brother Ted in the iconic Ted’s Cam­eras stores. Yes, Ted is his brother, and this is where Robert learnt about busi­ness, mar­ket­ing and brand­ing. The hands-on re­tail ex­pe­ri­ence at Ted’s over many years stood Robert in good stead when he es­tab­lished his own prac­tice, and also when it came to ad­vis­ing busi­ness clients. Robert also had vi­sions of play­ing pro­fes­sional foot­ball (soc­cer), which he played at the State League level, and of be­ing a rock star, as he played gui­tar and wrote songs with his brother Tom. But a sta­ble pro­fes­sion was needed, the Toth fam­ily hav­ing mi­grated from Hun­gary in 1958 with nothing.

TRANS­PARENCY AND FLEX­I­BIL­ITY FOR CLIENTS

Once Robert be­gan prac­tis­ing law, with his re­tail back­ground he quickly re­alised that clients didn’t like the hourly rates and billing meth­ods of lawyers, and he was one of the first to bring in fixed-fee prac­tices.

He also es­tab­lished a prac­tice early on that he con­tin­ues today – the prac­tice of giv­ing clients fee es­ti­mates based on the scope of work. ‘I felt this way we could be more trans­par­ent with our clients,’ Robert says. ‘Our clients could also bud­get prop­erly for their costs, so they didn’t get that sur­prise bill at the end.’

Clients are up­dated dur­ing the course of their file, with in­terim bills, flex­i­ble fee struc­tures and pay­ment op­tions. ‘It’s all about trans­parency,’ says Robert, ‘so we can get on with the work and our clients can fo­cus on their busi­ness.

‘We look to sup­port­ing our clients over the long term and through the good and the tough times.’

A GROW­ING PRAC­TICE

Toth & Co grew, as Robert says, ‘to a point where it was too big to be small’. While act­ing for Philip Mur­phy Wine & Spir­its in a huge case in­volv­ing the Aus­tralian Liquor Group Ltd and Coles Myer, Robert de­cided to merge his prac­tice in 2003 with an­other iconic Mel­bourne firm, Wise­would’s. Robert headed up their cor­po­rate and com­mer­cial prac­tice and brought across his fran­chise prac­tice, and Wise­would’s be­came well known as a fran­chise prac­tice. As Robert says, ‘I had to do some­thing, other­wise I would have been a head­line in the Her­ald Sun: “Lawyer found dead of stress at his desk”!’

Fran­chise law has al­ways been a par­tic­u­lar pas­sion of mine, and I still get ex­cited when a new busi­ness op­por­tu­nity comes along.”

Af­ter 12 years as a part­ner with Wise­would’s, Robert joined MMRB in late 2014 as a part­ner, again bring­ing across his es­tab­lished fran­chise prac­tice and in­dus­try rep­u­ta­tion to the firm.

A PAS­SION FOR FRAN­CHIS­ING

Through­out his prac­tice, Robert has main­tained a keen in­ter­est in busi­ness and fran­chis­ing and ad­vised many clients in the sec­tor, un­der­stand­ing the is­sues that arise for fran­chisors and fran­chisees.

As Robert says, ‘Fran­chise law has al­ways been a par­tic­u­lar pas­sion of mine, and I still get ex­cited when a new busi­ness op­por­tu­nity comes along, and then see­ing that busi­ness roll out to the mar­ket.’

Robert works for over­seas fran­chisors and com­pa­nies en­ter­ing the Aus­tralian mar­ket, and is a lo­cal agent and res­i­dent di­rec­tor of a number of over­seas com­pa­nies. He also as­sists Aus­tralian com­pa­nies to ex­pand over­seas via his in­ter­na­tional con­nec­tions and mem­ber­ship of the In­ter­na­tional Fran­chise Lawyers As­so­ci­a­tion (IFLA), a world­wide net­work of fran­chise and li­cens­ing lawyers.

GIV­ING BACK TO THE COM­MU­NITY

Giv­ing back is a key value of Robert’s prac­tice, hav­ing acted pro bono for 17 years for the Bon­nie Babes Foun­da­tion, and been a di­rec­tor of the El­wood Com­mu­nity Bank for over 15 years, un­der fran­chise with the Ade­laide and Bendigo Bank.

More re­cently, Robert joined the board of a not­for-profit (NFP) as­sist­ing dis­ad­van­taged youth, and is a di­rec­tor of Greater Good In­ter­na­tional, a com­pany that sup­ports Aid Hub In­ter­na­tional. Aid Hub is a world­wide NFP that sup­ports NGOs around the world to de­liver on the United Na­tions sus­tain­able devel­op­ment goals, which, as Robert says, will hope­fully en­sure that there con­tin­ues to be a live­able planet for our grand­chil­dren to en­joy in the fu­ture!

A SPE­CIAL­IST LE­GAL TEAM

The MMRB Fran­chise Li­cens­ing and Re­tail Group is a dy­namic group of lawyers with ex­per­tise in in­tel­lec­tual prop­erty, con­sumer and em­ploy­ment law.

We have a strong net­work of al­lied con­sul­tants who can as­sist and sup­port our clients to es­tab­lish their busi­ness model, from fi­nan­cial mod­el­ling and fea­si­bil­ity to mar­ket­ing brand­ing and sys­tems sup­port.”

‘We also have a strong net­work of al­lied con­sul­tants who can as­sist and sup­port our clients to es­tab­lish their busi­ness model, from fi­nan­cial mod­el­ling and fea­si­bil­ity to mar­ket­ing brand­ing and sys­tems sup­port,’ says Robert. ‘Our clients can there­fore come to us as one-stop shop to get their model es­tab­lished.’

The firm is also a mem­ber and strong sup­porter of the Fran­chise Coun­cil of Aus­tralia (FCA) and the US Com­mer­cial Ser­vice. Robert’s unique ex­pe­ri­ence in busi­ness and re­tail means he not only knows the law, but he can of­fer busi­ness and mar­ket knowl­edge. ‘We know what’s go­ing on in the world of fran­chis­ing,’ Robert says. ‘This is knowl­edge and ex­pe­ri­ence your lo­cal lawyer around the cor­ner may not have.’

‘Re­cently a client look­ing to de­velop their busi­ness in the child­care sec­tor came to me, and when I told them that I ac­tu­ally have eq­uity in the free­hold of child­care cen­tres with my broth­ers, he said, “Wow – I didn’t think I would find a lawyer who was ac­tu­ally in­volved in the sec­tor”.’ Be­ing in busi­ness not only as a lawyer re­ally does bring added skills and know-how to the ad­vice Robert can bring to es­tab­lish­ing or set­ting up a busi­ness en­ter­prise.

FRAN­CHIS­ING IN­DUS­TRY EX­PE­RI­ENCE

Robert has worked for over 35 years as­sist­ing fran­chisors, fran­chisees and mas­ter fran­chisees,

and is reg­u­larly in­volved in me­di­a­tion un­der the Fran­chis­ing Code and also in gen­eral com­mer­cial dis­putes. He is a great ad­vo­cate of be­ing di­rect and try­ing to re­solve dis­putes with­out lit­i­ga­tion.

‘Pick­ing up the phone and talk­ing to the op­pos­ing lawyer up front of­ten cuts through the is­sues,’ says Robert. ‘It helps us un­der­stand how close or far apart the par­ties re­ally are, and if there are any other agen­das go­ing on.’

Robert has also writ­ten nu­mer­ous ar­ti­cles based on his ex­per­tise, such as ‘Why can’t I sue my fran­chisor?’, ‘Help get me outta here’ and ‘Do class ac­tions work in fran­chis­ing?’, which are reg­u­larly pub­lished on­line and in jour­nals.

THE MOD­ERN FRAN­CHISE MAR­KET

Robert has seen the Aus­tralian fran­chis­ing land­scape change sig­nif­i­cantly since the 1980s. ‘Back then, there was lit­tle so­phis­ti­ca­tion; no Fran­chis­ing Code of Con­duct as we know it today, and lit­tle by way of con­sumer law pro­tec­tion,’ he ex­plains. ‘Peo­ple bought into a fran­chise, and it ei­ther worked or it didn’t. If it didn’t work, the fran­chisor gen­er­ally dis­ap­peared, or sim­ply car­ried on re­gard­less with very lit­tle ac­count­abil­ity.’

‘These days we are see­ing more of a part­ner­ship de­vel­op­ing be­tween fran­chisors and fran­chisees,’ Robert says. ‘We are look­ing to new and rel­e­vant busi­ness mod­els for the mod­ern mar­ket, in­clud­ing in­no­va­tive mod­els such as bran­chis­ing.’

‘We dis­cuss whether fran­chis­ing is the right model for ex­pan­sion. For some clients and founders it is just not the right model and we talk about these mat­ters openly at the first ses­sions.’

The term ‘bran­chis­ing’ de­scribes a sys­tem in which a fran­chisor and fran­chisee en­ter into a part­ner­ship or share­hold­ing ar­range­ment, with the fran­chisor tak­ing eq­uity – usu­ally the ma­jor­ity eq­uity stake in the fran­chise – with the fran­chisee. Robert states: ‘It is more of a hor­i­zon­tal re­la­tion­ship, rather than the tra­di­tional ver­ti­cal re­la­tion­ship where the fran­chisor has to­tal con­trol over the fran­chisee.

‘The Laser Clinic’s fran­chise model is good ex­am­ple of how bran­chis­ing can work well. I am not say­ing it is suit­able to all, and this is where our ex­per­tise can as­sist clients, along with their ad­vi­sors and con­sul­tants.

‘The bran­chise model also ad­dresses cur­rent fi­nan­cial is­sues in the sec­tor fol­low­ing the bank­ing royal com­mis­sion. Banks have tight­ened lend­ing poli­cies and in­di­cated they will not lend to fran­chisees where the only se­cu­rity is the eq­uity in their home.

‘Bran­chis­ing means the fran­chisor con­trib­utes to the set-up costs of the fran­chise mak­ing it more af­ford­able. The fran­chisor has a vested in­ter­est to en­sure that the busi­ness is suc­cess­ful, and the fran­chisee feels more read­ily sup­ported by the fran­chisor.’

THE FRAN­CHISE IN­DUS­TRY TODAY

Robert has seen the fran­chise sec­tor change over the past 40 years into a much more con­trolled en­vi­ron­ment, with the Code re­view in 2014 and now the par­lia­men­tary in­quiry into fran­chis­ing in 2019, although the rec­om­men­da­tions are yet to be in­tro­duced. ‘We are liv­ing in a dif­fer­ent world of risk

and re­ward for fran­chisors and fran­chisees,’ Robert says. ‘The mul­ti­tude of reg­u­la­tors, such as the ACCC, Aus­tralian Se­cu­ri­ties and In­vest­ment Com­mis­sion (ASIC) and the Fair Work

Om­buds­man, all have greater fund­ing and pow­ers to en­sure com­pli­ance by fran­chisors and busi­ness alike. So get­ting the right ex­pert ad­vice from spe­cial­ist lawyers is even more im­por­tant for all in the sec­tor.

For some clients and founders, fran­chis­ing is just not the right model, and we talk about these mat­ters openly at the first ses­sions.”

‘The re­tail sec­tor has also un­der­gone huge change over this pe­riod. With re­stricted lend­ing by banks, fund­ing fran­chisees into the busi­ness is more of a chal­lenge. Fran­chisors need to make en­try more ac­ces­si­ble and af­ford­able, and also en­sure the model works for their fran­chisees to avoid dis­putes aris­ing.’

A TRUSTED AD­VISER

Robert and the Fran­chise Li­cens­ing and Re­tail Group at MMRB look to es­tab­lish­ing long and sup­port­ive re­la­tion­ships with their clients. They pro­vide more than just le­gal ad­vice, with their ex­pe­ri­ence and spe­cialised ex­per­tise in all as­pects of busi­ness, re­tail and fran­chis­ing.

For more in­for­ma­tion, con­tact Marsh & Ma­her Rich­mond Ben­ni­son at:

03 9604 9400 (East Mel­bourne) 03 9580 8311 (Men­tone) en­[email protected] www.mmrb.com.au

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