The obligations of a franchisor are set out in the franchise agreement. Usually those obligations are set out in two separate clauses. The initial obligations are those that are required to allow a franchisee to start operating the franchise business and include the provision of initial training, initial stock and advice on how to launch […]
Absolutely! The whole point about franchising is that you are not in business by yourself and the franchisor is there to help you with all of the issues that may arise in your business whether those issues are of a technical nature or they relate to general business issues that would affect any business such […]
It is surprising how few prospective franchisees do any financial checks on the franchisor itself. There are a number of checks that it would be wise – actually essential – to carry out: Ask the franchisor for copies of its latest audited accounts and, ideally (although mostly franchisors would refuse to provide this) their latest […]
Almost all businesses are franchiseable except for those that are likely to have a short shelf life because they are a fad or because they are of a highly technical nature which it would be difficult to teach franchisees. That of course is not to say that it would be a good idea to franchise […]
The average management fee in the UK according to the latest Natwest &frasl BFA survey is about 8 percnt and in addition a separate marketing levy is usually charged of about 2 percent. The marketing levy is separate from the management fee because the franchisor can only use it to market and advertise and for […]
When you enter into a franchise you will be required to comply not only with the terms of the franchise agreement which can be an extremely lengthy and detailed commercial contract, but you will also be required to comply with the operations manual and the franchisor’s instructions. It is central to franchising that franchisees do […]
With very few exceptions all franchise agreements require new franchisees to pay an initial fee to the franchisor on entering into the franchise agreement. The initial fee reimburses the franchisor the substantial costs that the franchisor would have incurred in recruiting the franchisee as well as paying for the initial training, stock, equipment, vehicles, uniforms […]
Your ability to run a franchise from home will depend on the terms of your franchise agreement. There are, of course, many franchises which envisage that franchisees will operate from home and that is expressly provided for in the agreement. You will need to check this before you commit to a franchise. Inevitably those franchises […]
The great majority of franchise agreements in the UK are granted for five years but some franchises which involve very substantial initial investment last longer so that, for instance, a McDonald’s franchise agreement has a twenty five year term. The reason for the longer term is many fast food franchises is that it takes substantially […]
Generally, franchisors do not like pure investor franchisees because one of the reasons that franchising works so well in ensuring businesses are successful is that franchisees are actively involved in their franchise business and have a real interest in ensuring that the business is a success. If the franchisee is simply an investor that personal […]
