Franchise Information, advice and news.

Anyone planning to start a franchise business is encouraged to make sure they fully research any potential franchising agreements and are fully aware of their responsibilities.

A franchising agreement lays out the details of how a franchise should be operated in accordance with the main aims of the franchisor. The contract is a crucial part of setting-up a franchise operation and double-checking all the details at the start can help to prevent long-term problems.

When investing in a franchise, the franchisor usually has a number of guidelines and rules that must be put in to practice by all franchisees. They can range from the obvious such as ensuring that branding remains consistent across all the franchises but they can also include details of marketing commitments as well as supply-chain management.

Agreements should also include details of what type of training, support and advice will be provided by the franchisor as well as information on any potential central marketing campaigns or advertising that is planned and any possible commitments that the franchisee needs to make concerning reinvesting in the business. The terms of payments of the franchisee as well as the conditions for renewal of the franchise will also need to be detailed fully in the document.

In addition, franchisees are reminded that they could be required to obey certain central franchise commitments to ensure that the operating base of the franchise is kept in good condition. For insurance, a restaurant franchise could be required to ensure that cosmetic refurbishment is carried out every five years and that window and door frames are painted a certain colour in order to ensure that branding is consistent across the franchise network. Such rules could also apply to any vehicles or signs connected to a franchise operation.

Franchising agreements are an important part of a successful franchise business and therefore, they should be drawn-up by a specialist franchise lawyer who fully understands the sector. Contracts must clearly lay out the obligations of the franchisor and the franchisee as well as reflecting any previous promises made by franchise prospectuses.

The introduction of the code of ethical conduct in franchising, developed by the European Franchise Federation has also helped to ensure that drawing up a franchise agreement is more straightforward and ensures that certain standards are adhered to as well as complying with UK and European laws.

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