For both franchisors and franchisees, the franchising agreement you sign is essential to regulate the terms of your relationship and allow you to run your business as intended.
At Lewis Denley, we’re not just a team of legal experts but commercially-minded individuals with a passion for helping businesses grow.
Our franchise agreement solicitors’ expertise
A franchising agreement could be your solution you need to achieve your commercial goals.
For the franchisor (the business offering the franchise licence), it is an opportunity to expand your reach and boost revenue without needing a major boost in resources and productivity. For the franchisee (the business licenced under a franchise agreement), it is an opportunity to take advantage of an established brand and to give your new company the strongest possible start.
We have dealt with a wide range of issues surrounding the franchise structure, including negotiating the terms of the agreement, licensing issues, infringement issues, and associated employment law issues.
We welcome all types of business of all structures, sizes, and from all industries. We will carefully tailor our advice to suit your business strategy and we find for this reason, many of our clients stick with us for the long haul, developing an ongoing successful partnership with our commercial law team.
What is a franchising agreement?
The most common type of franchising agreement is the business format franchise. Under such an agreement the franchisor grants a licence to the franchisee enabling them to run their business under the franchisor’s established brand.
The incentive for the franchisee is that they can receive the benefits of a tried and tested business model. The franchisor will typically provide training, procedures, and quality control and in return the franchisee will pay a regular fee.
Other types of agreements such as agency agreements and distribution agreements are also sometimes referred to as types of franchising agreement, although legally they have different effects and are used for different purposes.
Why enter into a franchise agreement?
For new businesses, having the oversight of an established brand can be more beneficial than building your own brand from scratch. Below are some of the benefits of entering into a franchising agreement:
- Brand recognition: Using the trademark of an existing brand is likely to give you access to an immediate customer base, saving you considerable start-up marketing costs
- Quality control: With the franchisor’s supervision, you can be confident that the products and services you are supplying are consistent and of decent quality
- Managerial supervision: operating a franchise can almost be like working under a mentor. It is in the franchisor’s interests for your business to succeed. Therefore, they are likely to provide some level of supervision and support
For established businesses, franchising is a method of expanding your business to promote rapid growth, reach, and customer loyalty. A franchising agreement allows others to purchase your model of business and run their company under your brand, boosting your revenue while letting you retain overall control.
Can you negotiate the terms of a franchise agreement?
Typically, franchisors set their agreements in stone with little room for negotiation on the terms. This is particularly the case with large and well established franchises. With newer franchises, there may be some scope for negotiation.
In some cases, terms may feel unfair. For example, if the franchisor requires you to use a certain type of equipment that is more expensive than the industry standard. Our franchise agreements solicitors can provide further advice on the terms of your agreement and whether they are suitable for your business purposes.
Why consult our franchise agreement solicitors?
Franchising agreements are typically drafted in favour of the franchisor. For this reason, it is absolutely essential that you gain independent legal advice so you understand the full effect of the agreement that you are signing.
Our specialist commercial solicitors will provide full advice about the terms of the agreement and the fees you will encounter, such as upfront fees, the regular ongoing payments, and possible additional fees, for example, if you withdraw from the agreement early.
As commercially-minded lawyers, we value innovation and finding creative ways to help businesses succeed. We look forward to working closely with you to discover whether a franchising agreement is the right option for you.
Get in touch with our franchise agreement solicitors in Horsham, West Sussex