Franchising solicitors

What is a Franchise Agreement?

The Franchise Agreement is the building block upon which the relationship between the Franchisee and Franchisor rests. Fundamentally, it sets out the respective rights and responsibilities of both the Franchisee and the Franchisor.

Nonetheless no one Franchise Agreement is the same as another. Therefore, regardless of whether you are looking to set up a fitness franchise network, or a local coffee shop franchise chain, you will require specialist advice from an adviser with legal expertise in Franchising. The adviser will work to understand your particular business need and will in turn draft a Franchise Agreement that is tailored to the particulars of a given Franchise system.

What does a Franchise Agreement include?

Some of the provisions of a Franchise Agreement are likely to include:

• The rights granted to the Franchisee
• The obligations of the Franchisee
• The obligations of the Franchisor both initially and ongoing
• The duration of the Franchise Agreement
• The terms for renewal of the Franchise Agreement
• The terms governing the potential sale of the Franchise
• Terms for use of the Intellectual Property of the Franchisor
• Provisions for termination of the Franchise Agreement

This, however, is not an exhaustive list and the expertise of an experienced Franchise solicitor is required to draft a document which comprehensively sets out the relationship between the parties.

Established franchising support

With many years of experience in drafting Franchise Agreements for businesses across a variety of sectors and ranging from international brands to local enterprises, our Franchising Team is uniquely placed to help you develop a tailored and comprehensive Franchise Agreement, which will be uniquely suited to your business and Franchising needs.

We offer a free initial consultation to anyone seeking franchise legal advice. We are always competitively priced, pleased to discuss costs with you and, where appropriate, will endeavour to agree a fixed fee for our involvement.

Franchising a business commits both the Franchisor and the Franchisee into a long term commitment to one another with the purpose of achieving business success. However, the relationship between the Franchisor and the Franchisee is not immune to conflict.

Types of franchise disputes

Some of the more common areas of franchise disputes are:

• The Franchisee believes there is a lack of support from the Franchisor.
• The Franchisor believes that the Franchisee is not following the system.
• The Franchisee believes he is not making the level of profit that the Franchisor had promised.
• The Franchisor believes that the Franchisee is underperforming.

In each of these situations, the Franchisor will have one opinion and the Franchisee will have another, and it is vital that the dispute is resolved adequately and ideally amicably, to ensure continued business success.

Some of the following are effective methods which can aid in preventing disputes arising, as well as in their resolution.

Helping to avoid disputes

The best way to avoid a dispute is to research the opportunity thoroughly before investing and making sure you understand what is being offered and the obligations on both parties under the Franchise Agreement. To guide you through this opportunity and associated obligations you should seek the advice of a solicitor with expertise in Franchising. With our long-established expertise in Franchising, we will be able to provide you with a report which explains the detail in the Franchise Agreement and lets you know if it contains anything unusual or unnecessarily onerous. We may also be able to suggest amendments or relaxations which would be fair and reasonable.

Helping to resolve disputes

If a dispute does occur it is important to resolve it quickly and as amicably as possible.

Serious breaches of the Franchise Agreement

Franchisors can often be considered heavy-handed in their approach to disputes and this is often with very good reason. The Franchisor not only must consider himself in a dispute but also the interest of other franchisees in the network. If one franchisee steps out of line and damages the brand, the Franchisor will want to stop this immediately to protect the interests of all the other franchise owners. Franchisors therefore often act quickly to involve solicitors and instruct them to terminate or seek termination of the Franchisee’s Agreement by serving notice.

Minor breaches of the Franchise Agreement

For minor breaches, the Franchisor will usually prefer that the breach be remedied within a time period, resulting in a swift resolution rather than resorting to litigation. It is therefore in both parties interests to consider alternative forms of dispute resolution, including mediation and, if necessary, arbitration.

Both of these processes can be very effective in reaching a positive outcome and the British Franchise Association have established mediation and arbitration schemes which can be used to assist in this process.

Becoming a ‘franchisee’ is a great opportunity to own and operate a successful business, using an established brand and business model which compliments your business skills.

Buying a franchise

In order to buy into a franchise, you will need to sign a Franchise Agreement with the holder of the franchise rights,(whether the franchisor or a master franchisee). Franchise Agreements are often lengthy, complicated documents which are generally weighted in the franchisor’s favour. We specialise in advising you on the journey of becoming a franchisee by making sure you fully understand the agreement you will enter into and have asked all the important questions you need to of the franchisor.

Also, more and more people are entering the world of franchising by purchasing an existing franchise business, known as a ‘franchise resale’. Opportunities to benefit from this may arise when the original Franchisee is considering retirement, relocation, or pursuit of other business interests. The best exit for such a franchisee is often to sell their business as a “Franchise Resale”.

Selling a franchise

In turn a potential purchaser of a Franchise Resale is likely to be an individual seeking the traditional benefits of franchising (training, support and a proven business model) as well as some of the following advantages:

• Brand recognition
• Track record
• Staff
• Cash flow
• Established Customer base

With some Franchise brands reaching saturation in the UK, to the extent that you can only buy a franchise via a Franchise Resale (rather than through the traditional approach of acquiring a virgin territory), we predict that the number of Franchise Resales taking place will continue to grow year on year.

Through our many years of experience, we have helped many franchise owners sell their franchise and, vice-versa, and we have also helped numerous new franchisees purchase a franchise resale opportunity.

We offer a free initial consultation to anyone seeking franchise legal advice. We are always competitively priced, pleased to discuss costs with you and, where appropriate, will endeavour to agree a fixed fee for our involvement.

Franchising is increasingly becoming one of the more common methods of international expansion, particularly in the retail and food sectors.

What is international franchising?

Put simply, ‘International Franchising’ is the granting of a licence by one business based in the UK to another based overseas, which entitles the latter to run their own business following the processes, procedures and training set out by the franchisor. In return for management services fees, the franchisor (the one granting the licence) allows the franchisee to trade under the name of the franchisor and gives them a support package containing all that they need to operate that business along with ongoing support.

The benefits of international franchising

The many benefits of International Franchising as a method for business expansion include:

Cost

If a business were to expand overseas itself it would have to bear all the development costs including property, staffing and other overheads in the overseas territory. Franchising allows them to partner with a franchisee and use the franchisee’s capital to set up and roll out the operation in a new territory. A large network of international franchisees also allows the franchisor to make significant savings on group buying discounts!

Quick international brand growth

As expansion can be achieved easily through franchising it allows the franchisor to grow an international brand quickly.

Local knowledge

A franchise partner based in a country knows all about the local market, the language and the business practices of that country. In particular, the right partner will know if any adaption is required to make the business successful in that country. For example, any Scottish franchisee for an American fashion brand will know that warm jackets should be stocked all year round!

Market diversification

In an uncertain economic climate, it is beneficial to the franchisor to have operations in multiple markets to safeguard itself from adverse conditions in any one particular market.

Established franchising support

Our specialists have many years of experience advising clients on international franchising. From global giants like Nokia to local SME’s, they have advised on the international structure, entry strategy and franchise documentation for expansion into a wide variety of territories. Last year alone we advised clients on expansion into mainland Europe, the Middle East, Asia and North America.

We also help businesses in the UK acquire rights to operate ‘master franchise’ businesses in the UK. This often involves detailed negotiation of a Master Franchise Agreement (or similar international franchise agreement) to make sure our clients have a firm foundation on which to grow their franchise business in the UK.

We offer a free initial consultation to anyone seeking franchise legal advice. We are always competitively priced, pleased to discuss costs with you and, where appropriate, will endeavour to agree a fixed fee for our involvement.

We are specialists in brand protection and management, helping you to look after your brand, maximise its potential and react effectively to threats at all levels, both offline and online.

Our team manages more brand rights than any other Scottish-based legal firm and offers a holistic, contentious and non-contentious brand management service.

As both a law firm and trade mark attorneys, we act on behalf of our clients on brand and trade mark related matters all over the world and our filing and prosecution practice is recognised nationally and internationally. We regularly manage brand matters for clients in all five continents.

The key to effective brand management is a solid base of registered rights. Our team has substantial experience in seeking and securing registered trade mark rights and managing trade mark and domain name registration strategies.

We also regularly advise on the law relating to passing off and other means through which rights in brands can be protected.

Our brand infringement team are well versed in devising and successfully implementing strategies to address brand infringements, whether sole or cross platform, to prevent other profiting from your hard work.

Contracts are an essential tool for your business. Whether you are dealing with customers, suppliers, partners or entering into any other business relationship it is essential that you protect yourself against future problems by setting out an agreement in writing.

Our commercial and corporate solicitors work with businesses and individuals across Scotland, the UK and internationally to draft, review and finalise all manner of commercial contracts and terms and conditions.

Whether you’re a small business employing one or two people or a large company, our solicitors can draft legal documents to suit all types of commercial agreements.

We offer a free initial consultation to anyone seeking advice on a contract. We are always competitively priced and pleased to discuss costs with you. We will endeavour to agree a fixed-fee for any specific piece of work or alternatively we offer many clients a cost-effective retainer service where we provide regular business advice and legal services for a fixed monthly/quarterly fee.