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Q: I am looking seriously at buying a franchise. I have received a copy of the franchise agreement and it seems to lean very much towards protecting the franchisor’s interests. Is this typical? Am I right to be concerned or am I being too cautious?

Apr 30 2007

Answered by: Julie Waites Ask a question

Most good franchise agreements are drafted in favour of the franchisor so that the franchisor has the ability to protect the business brand and system from abuse by an errant franchisee. If you become a franchisee you will not have any legal relationship with any of the other franchisees in the business and will need to rely on the strength of the agreement to ensure that the franchisor can protect you and itself.

However it is important that you take legal advice before entering into a franchise agreement and paying over any money, preferably from a solicitor who is experienced in franchising. You can access a list of BFA affiliated solicitors from the British Franchise Association’s website www.british-franchise.org.uk

Comments [1]

Comment by Keith Green

Thursday 3rd May 2007

Before spending lots of money with a solicitor I would speak to a few existing franchisees. Are they happy with their business? How many franchisees does the company have and what is their success/failure rate? Also check out the franchisor's directors and their business background. What other business interests do they have? Will they support you properly or are their attentions diverted by other business interests elsewhere?

Finally, have you considered buying either an existing, already running franchise (they come up quite often) or looking at a non-franchised business for sale in the same business sector. Try www.businessesforsale.com as a good starting point.

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