Keeping the Balance in Franchising Law
by
DCS Lawyers
Many franchisees are inexperienced business owners. Often, they buy into a franchise because they believe an established business holds less risk than a start-up. It is here franchisors must be cautious. Even if franchisors meet all their obligations under the Code, an aggrieved franchisee might still claim misrepresentation of the business opportunity and commence legal action under the TPA.
There can be no doubt that entering into a franchise agreement carries some risk – franchising is not a magical formula that eliminates the possibility of failure. Properly structured and executed it can, at best, mitigate some risk through offering a proven business formula and an established brand. As such, the ultimate decision as to the viability of the enterprise must rest with the franchisee.
Under the Code, all franchisors are required to advise potential franchisees to seek independent business, legal and accounting advice. In addition, making misleading representations or promises about the business opportunity is both a clear contravention of the TPA and poor business practice.
However, the prudent franchisor will go beyond their legal obligations and strongly advise and caution potential franchisees to fully investigate and test the system on offer. Further, they will obtain specialist DC Strategy - franchise consultants
05.08.2008
FCA Member
DCS Lawyers News
Paul Kean joins DC Strategy Legal to provide specialist franchise advice
14/03/2011 - DC Strategy Legal is pleased to announce the appointment of ...
Is a franchisor obligated to renew a lease prior to the completion of a sale of an existing franchise?
18/09/2008 - In a recent DC Strategy case, the question as to how soon a ...
Franchise Contract stability- the effect of “Ketchell’s case”
18/09/2008 - The High Court’s unanimous Ketchell Case decision was handed ...
Targeting the masses – clever marketing or just spam?
27/08/2008 - As electronic marketing increasingly supersedes traditional ...
Recent Developments in NSW Real Estate law
27/08/2008 - The Office of Fair Trading NSW (OFT) recently released a report ...
Using your IP rights
6/08/2008 - Businesses face losing rights to critical intellectual property ...
Contact DCS Lawyers
International Head Office
Level 5, 530 Collins Street
Melbourne
VIC 3000
Tel: 03 8102 9200
Fax: 03 8615 7298
