How to use a franchising lawyer

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Inside Franchise Business: lawyers are crucial to the franchise buying processIf you’re considering buying a franchise, you’ve probably been given an overload of information from the franchisor and might even feel that you can wade through this information yourself.

However, there is huge value in obtaining independent legal advice on a franchise opportunity prior to signing on the dotted line. Below are some tips on how to get the most of out of this advice.

Find an expert

First and foremost, it’s important that you find a lawyer with specialist franchising expertise. Franchising in Australia is heavily regulated by the Franchising Code of Conduct, and a franchising lawyer will have a good understanding of the Code as well as general insight into the industry that only comes with experience.

A good place to start is the services and advisors listings on this webite, which is the official directory of the Franchise Council of Australia and lists a number of specialist lawyers and other advisers.

Engage your lawyer early on

Even if you haven’t yet received the franchise documents from the franchisor, it’s a good idea to have an initial chat with your lawyer to let them know about the opportunity you’re considering and what stage of the process you’re at. At this stage, you might also like to keep notes on any statements the franchisor has made about the opportunity, such as sales projections.

Your franchising lawyer will be able to advise you on what to expect and let you know if anything seems amiss, as well as recommend ways to substantiate or clarify any representations.

Franchise review

Perhaps the key piece of the process is ensuring the franchise documents (mainly, the franchise agreement and disclosure document) are then reviewed by your lawyer.

A good franchising lawyer will review these documents back to front and come back to you with:

  • Clear advice about your rights and obligations under the franchise agreement
  • Whether the documents are compliant with the Code
  • Whether any terms are unfair
  • Advice to ensure that any representations made by the franchisor are accurately reflected in the documents
  • Recommendations for any changes to the franchise agreement

Negotiations

Your franchising lawyer will also prove invaluable in guiding you through any negotiations with the franchisor, or undertaking these negotiations on your behalf. As a franchising lawyer will have a good understanding of the changes that are likely to be accepted, these negotiations can be swift and seamless.

Having a good understanding of how and when you can use a franchising lawyer will make the process of getting legal advice much smoother and ensure you get the most out of the advice. 

Lastly, the support you get from your franchising lawyer doesn’t need to end there. An expert franchising lawyer will be able to advise you on any day-to-day issues that crop up in future, such as advising you in relation to supply arrangements and ongoing compliance with the franchise agreement.

Marianne Marchesi

Marianne is the founder and principal of Legalite, and is a start-up, small business and franchising lawyer. View More...
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