Entries by Hamilton Pratt

What does a franchisee get for their investment?

The answer to this all important question depends very much on the franchisor, how long it has been trading, how successful its franchisees are and the terms of the franchise agreement. Technically, what franchisees will receive is set out in the franchise agreement.  In essence that will (or should) amount to initial and continuing training, […]

Can I run a franchise from home?

There are a number of franchises which envisage franchisees operating from their own home.  Often these franchises are operated on a part time basis. Even if you do work from home the franchise agreement may impose requirements for a separate office, secure storage and so on. If you are considering operating anything but a retail […]

Why does a franchisor charge a management service fee?

Not all do!  There are a small number of franchisors that don’t charge this fee because they require their franchisees to purchase products from them and they make their profit from their product supplies. This highlights that all prospective franchisees must make sure that if there is an obligation to buy products from the franchisor […]

On what basis can a franchisor terminate a franchise agreement?

All franchise agreements should set out the circumstances in which a franchisor can terminate in a very detailed termination clause setting out each situation that would lead to termination.  Certainly if a franchisee became insolvent or ceased to trade or passed confidential information on to a third party termination would be immediate.   You would also […]

Under what circumstances would a franchisor reduce the size of a franchisee’s trading territory?

The first thing to say is that not all franchises allocate a specific territory to franchisees but most do.  Within a franchisee’s territory franchisees are required to promote and extend their franchised business so what franchisees cannot do is to achieve a certain level of turnover within their territory with which they are happy and […]

Should I be wary of a franchisor offering a discount on the initial investment if I agree to become a franchisee within a certain time frame?

The short answer is “yes”! Entering into a franchise agreement is not something that you should ever rush and franchisors should never put franchisees under pressure to take a franchise.  All prospective franchisees should be aware of “danger signals” and one of those is where a franchisor tries to put pressure on a prospective franchisee […]