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Is your business ready to be franchised?

Sarah Stowe

Inside Franchise Business: Marwan Kojok, Baybridge LawyersBaybridge Lawyers is Australia’s leading franchise firm. As the NAB business banking runner up and finalist for best law firm in 2017/2018 financial year, we understand what it takes to help our clients achieve their goals and most importantly deliver the services they require.

Our team provide a cost effective and practical way for clients to achieve their true potential. Through working with businesses with multiple points of presence, emerging franchise networks and established franchise networks, we are well versed to provide solutions for any stage of a client’s business development.

Expertise is spread across multiple industries including food retail, mobile services, health, beauty and fitness.

We are a corporate and commercial legal and advisory firm. Our team consist of highly experienced advisors and lawyers assisting businesses with day-to-day management and compliance with local laws.

Do you have a successful business model?

Franchising is a proven and successful formula for expanding your business.

Franchising is globally recognised as a successful business growth model and an exciting marketing method, requiring elements of skill, patience, diligence from you the business owner. When adequately applied, it offers mutual benefit and satisfaction for all parties involved, namely you as the franchisor and your network of individual franchisees.

Franchising is a business relationship in which the franchisor (the owner of the business) licenses specific trading rights to a third party, i.e. the franchisee.

The franchisee is granted the right to use the franchisor’s business’ trademarks (brand), the operating methods and merchandising the goods or service for a fixed period of time. Various non-recurring and recurring fees, such as franchise license fees and franchise royalties will be paid by the licensed franchisee.

This is in exchange for granting the franchisor the right to undertake control over certain aspects of how the business is conducted, in order to maintain an acceptable standard of service and delivery across the network in a consistent manner.

Franchising in Australia

Franchising is not a new business concept and has now been adapted in various forms across most industry sectors in Australia, its economic imprint is substantial and growing.

The retail sector in particular has been revolutionised by the adoption of franchising, providing an opportunity for small business holders with the good business sense, financial resources and a commitment to invest in structures, systems and operations, to compete against the large scale corporations that have traditionally dominated the Australian retailing landscape.

Is your business ready to be franchised?

The concept of franchising can be adaptable to any business, provided it qualifies for some basic characteristics;

  1. Is your business proven? – Does the business you are going to franchise have a track record of success? Has that been duplicated and proven to be a credible business model? Is the franchise you are looking to offer manageable by others? Is there a clear and measurable avenue for growth and expansion in your specific market?
  1. Is your business concept unique? – Is your business adequately differentiated from its competitors? Is it marketable as a business opportunity? Does it have a sustainable competitive advantage?
  1. Is your business systemised? – Do you have tried and tested operational systems in place? Are operating procedures documented? Could someone learn to operate your business in three months or less?
  1. Is your business commercially profitable? – Does your business have a marketable return on investment for a prospective franchisee even after all royalties are distributed? If a business can’t generate a healthy enough return on investment after deducting a royalty it’s going to have difficulty keeping franchisees happy.
  1. Is your franchise model commercially viable to you? – Do you know what it will cost to create your franchise model? What are the costs of marketing your franchise offer? What will be the growth assumptions of your franchise network? Have you determined what it will cost you to support your franchise network, now and in the future? What will be your returns, now and in the future?
  1. Is there a clear and determined long term strategy in place? – Are you committed to building, growing and expanding your business? Are you set up for what that commitment will require of your time and your desired lifestyle? Do you have an assumed exit strategy?

If you answered yes to most of these then you could quite possibly be suitable for franchising

What do you do next?

First and foremost you should engage experienced professionals who specialise in franchise development and with their guidance and expertise determine a sound and well-structured plan for the franchise model expansion of your business.

If you are thinking of franchising, we would welcome the opportunity to speak to you to discuss your needs further and how we may be able to assist.

Who is Baybridge Lawyers?

Marwan Kojok is managing partner of premier franchise firm Baybridge Lawyers where he specialises in emerging and mature franchise systems and franchise litigation matters. Marwan has consistently been recognised by International Who’s Who of Franchise Lawyers, working closely with many international brands and firms across the globe.

With over 20 years’ experience assisting franchisors manage their legal affairs along with assisting in the development of their networks, protecting and enforcing their Intellectual Property and maintaining their brand goodwill.

Baybridge Lawyers offer the following services: franchise set ups, franchise transactions and compliance, attending to sale contracts of businesses and assets, intellectual property protection and enforcement, dispute resolution and litigation, corporate transactions including preparation of partnership, joint venture and shareholder arrangements.