Get advice from a franchise legal expert
When it comes to the franchise agreement, you will need to choose a solicitor to carefully review the terms for you. Almost all solicitors today are specialists in a particular field, and franchising is certainly no exception. However, a solicitor who does not understand franchising may often look to negotiate and change a franchise agreement (perhaps running out of red ink in the process!). They may tell you that it is unreasonable and that you should not sign it under any circumstances. They will then charge you
a fee based on the time taken to undertake this exercise.
Understand franchise obligations and potential queries
A specialist franchise lawyer will understand the intricacies of a franchise agreement and will be able to review it and clearly explain the terms to you before you sign. They will report on the agreement, rather than attempt to change it, unless necessary for legal or ethical reasons, and will be familiar with the British Franchise Association’s Code of Ethics. They will also be able to provide a comprehensive report that highlights the following key points:
- Your rights and duties
- Anything that may be unusual or onerous in the contract
- Anything that may be missing which they would expect to see in an
ethical business format franchise agreement - Any areas that you need to clarify with the franchisor
If anything needs to be changed or clarified then this is usually set out in a legally binding side letter, signed at the same time as the agreement, and attached to it.
Fees and timescales
You should agree the fee and the timetable in advance and ask them to tell you how much franchising work they do. This is so you are sure that you are dealing with their franchising expert and not an inexperienced person working for the accredited firm. It is usually not necessary to meet the solicitor so it should not matter where they are located – everything can be easily done by post, email, and telephone. Such a report should be undertaken for a fixed fee of around £400-700 and should only take a few
weeks.