Why You Need to Consult a Franchising Lawyer

If you’re considering entering a franchise business, you’ve likely been bombarded with loads of information from the franchisor. This may boost your confidence and make you feel that you would be able to go through all this information yourself and make sense of everything in the agreement document.

However, it’s important that you recognise the value in seeking some independent legal advice from an experienced franchise lawyer. It’s important that you do this before you sign on the dotted line. Here are some tips on how to go about doing this the right way:

Tips to consulting a franchising lawyer

#1 Look for an expert lawyer

The very first thing to do is to look for an experienced franchise lawyer. The Franchising Code of Conduct regulates the franchise industry in Australia. An expert in this field will have very good understanding of these rules and regulations. You can look at the Franchise Council of Australia’s official directory, where you will find listings of advisors and franchise lawyers.

#2 Engage the services of a lawyer early in the process

Even if you are considering various options and haven’t yet received any documentation from the franchisor, it’s best to have an initial consultation with your lawyer. Keep the person informed about your prospective plans and what stage of the franchising process you’re at. Maintain detailed notes of the statements that the franchise company has made regarding sales projections etc.

The franchising lawyer will be able to provide sound advice on what you should be looking out for and how to identify if something is not as it should be. They will also tell you exactly how you can clarify representations if any.

#3 Reviewing the franchise

The first stage of the process is to make sure that you get your lawyer to review all the franchise documents such as the actual agreement and the disclosure document. A seasoned franchise lawyer will carefully review the documents and will:

  • Provide solid advice about what your obligations and rights are under that agreement.
  • Tell you whether the documents and paperwork are compliant with the existing Code.
  • Tell you if some of the terms sound unfair.
  • Advise you to ensure that when the franchisor makes any representations, they need to be reflected in the documents accurately.
  • Recommend alterations to the franchise agreement of needed.

#4 The negotiation phase

The franchise lawyer will guide you through all the negotiations you have with the franchisor. They may also undertake the negotiations on your behalf. Since they have legal expertise in the franchising industry, they will also have a very solid understanding of which changes the franchisor will be willing to accept, resulting in seamless and quick negotiations.

Ongoing legal advice

Understanding when and how you need to use a franchise lawyer will make the entire process of navigating these waters smoother; it will also help you get the best out of their professional advice. But that isn’t where the lawyer’s role ends. This legal expert can also be there to guide you and help you through any problems that surface in the future.

They can prove to be an invaluable resource in providing advice related to ongoing compliance with your franchising agreement as well as all the supply arrangements etc. Taking these steps is one of the best ways to cover your bases and start off on your franchising venture on the right foot.

If you want to know anything more about setting up a franchise business or want some sound and professional advice, call The Franchise Institute on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.

Thanks for reading,
The Franchise Institute Team
1300 855 435

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