5 REASONS...

Legal advice is fundamental to a good franchise purchase.

Why you need to get legal.

The challenges of franchising can be faced with good preparation. And that all starts with understanding what the business will require from you as a franchisee, and your rights and obligations.

1. A FRANCHISE AGREEMENT IS A LEGAL

CONTRACT

A franchise agreement is a business contract that binds both parties to certain obligations. Before signing a franchise agreement it’s crucial to undertake research or due diligence so you can make an informed decision about the business you are investing in. A franchise is no different from any other business purchase in as much as you are bound by the contractual terms.

2. THE DOCUMENTS HOLD THE KEY TO YOUR

BUSINESS

Franchisees will get an information statement, disclosure document, franchise agreement, perhaps a lease agreement if there’s a tenancy involved... while these can be heavy reading, it makes sense to familiarise yourself with the details of these legal documents so there are no surprises.

3. LAWYERS CAN SHED LIGHT ON THE DETAILS

There’s no substitute for taking legal advice on your franchise purchase. Once you’ve read the documents you may have concerns or need clarification about some of the details. A dedicated franchise lawyer understands the terms and the consequences of certain clauses in a way that your local solicitor will not, and is familiar with previous cases and disputes.

4. SHORTCUTS CAN BE EXPENSIVE

It costs to invest in a lawyer to read and advise on your franchise documents at a time when you’re counting every cent, but it can be considerably more expensive if it all goes wrong once you’re in business.

5. IN CASE OF A DISPUTE

There could be many causes for a franchise purchase to turn sour and end up in a legal stoush but common triggers include miscommunication and misunderstanding, claims of misrepresentation, and complaints over the supply of goods. Some of these might be mitigated or avoided with early legal intervention or clarification - before signing the franchise agreement.