Franchising Solicitors

Franchising can offer your business the opportunity to expand, whilst increasing income at the same time.  

Each year the number of franchised businesses in the UK increases, and we have valuable experience and insight through our years of working with both franchisees and franchisors.

If you are thinking about franchising your business, we provide you here with useful tips on the steps you should consider:

Understand franchising

Take the time to ensure that you fully understand what franchising is, and how it works in your business sector and for your business. An experienced franchise consultant can provide useful advice and guidance from the outset or you can review the British Franchise Association (BFA) website here.

Demonstrate franchise-ability

You need to be satisfied, as does your franchise consultant or any other advisers that you use, that your business, or a variant of it, is capable of successfully being franchised, i.e. it can be successfully replicated, and that the market is of sufficient size to support your franchisees.

Produce business plans

You should have a comprehensive business plan for your own business, and realistic draft plans for potential franchisees.

Ensure you have adequate capital

Despite franchising seeming to be an economic way to expand your business, many franchisors fail due to the business having insufficient capital, meaning that it has to rely on the up front fees from franchisees to keep it afloat.  Although every business is different and the cost involved in franchising them will differ, getting from idea to signing up your first franchisee could well cost over £100,000.

Document everything properly

Due to the nature of franchising it is vital to have comprehensive and correct documentation in place, which as a minimum will include the franchise agreement and the operating manual. Prospective franchisees and their advisers will look critically at your franchise agreement and you may be judged by it.  It should be prepared by an experienced franchise lawyer, which is where we can help.

Follow your own procedures

Your franchisees will be required to operate in accordance with the franchise agreement and the operating manual and it is important that any franchised outlets owned by you are also operated in such a way to ensure consistency throughout the brand.

Choose your franchisees carefully

The success of your franchisees will determine the success of the franchise.  When selecting your franchisees ensure that you take the time to get to know the individuals behind the potential franchised outlet.  You do not want to be spending your time dealing with underperforming or non-compliant franchisees when you could be spending that time developing and managing your brand.

Maintain uniformity

It is important that all of your franchisees sign the same agreement (although it may evolve over time). Do not be tempted to agree changes to the agreement without first having sought the professional advice of your franchise lawyer.  Whilst using a side letter can be useful, it is important that this is prepared professionally.

Be honest

The very nature of franchising dictates that, by and large, the franchisor has more power than its franchisees. The BFA’s Code of Ethics requires fair play, and franchisors and franchisees should maintain honesty and integrity in their relationship with one another.

Plan ahead

As your business develops and grows, your business plan will need to change accordingly.  Due to the nature of franchising and the documentation involved, existing franchise agreements may not be able to be changed for as long as five years. You should bear this in mind when devising your business plan and making plans for the future.

To discuss franchising your business further, contact Geoffrey Sturgess on 023 8071 7717 or email geoffreysturgess@warnergoodman.co.uk.

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The information and advice was clear and concise and made what was a very stressful time a little easier.