MARSH & MAHER RICHMOND BENNISON:

MORE THAN JUST LEGAL ADVICE

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) enquiries@mmrb.com.au www.mmrb.com.au