I’m looking at purchasing a Franchise. Can I contact existing Franchisees to find out what they think of the Franchisor and the Franchise system?
Answered by Robert Toth from Wisewould Mahony - Franchise Lawyers
Yes, and in fact we recommend that you certainly do so. A Franchisor must give you a Disclosure Document for the Franchise at least 14 days before you enter into a Franchise Agreement or make a non-refundable payment in respect of the Agreement.
Part of the Disclosure Document will be a contact list for all existing Franchisees – you should make enquiries with as many Franchisees as possible to find out about their experiences with the Franchise and help you assess the likelihood that your business will be a success.
In addition, from 1 March 2008, a Disclosure Document must contain contact details for past Franchisees (such as those that have transferred their business, whose business ceased to operate, or whose Franchise Agreement was terminated), unless the past Franchisee has requested their details not be given.
Part of the Disclosure Document will be a contact list for all existing Franchisees – you should make enquiries with as many Franchisees as possible to find out about their experiences with the Franchise and help you assess the likelihood that your business will be a success.
In addition, from 1 March 2008, a Disclosure Document must contain contact details for past Franchisees (such as those that have transferred their business, whose business ceased to operate, or whose Franchise Agreement was terminated), unless the past Franchisee has requested their details not be given.
About Robert Toth
Robert Toth is the Franchise Partner at Wisewould Mahony - Franchise Lawyers. Robert Toth is an Accredited Business Law Specialist, a member of the International Franchise Lawyers Association (IFLA), a member of the Australian Institute of Company Directors.
You should always check independently that an ask an expert answer published on Franchise Business applies to your particular circumstances.
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Contact Wisewould Mahony - Franchise Lawyers
Tel: 1300 421 405
