Buying a Franchise

A franchise involves a business owner (the franchisor) giving you (the franchisee) the right, upon payment of a fee, to market and sell the franchisor’s products or services in accordance with the franchisor’s system of management and operational procedures. Franchising is regulated by the mandatory Franchising Code Of Conduct which requires franchisors to give prospective franchisees certain information to allow them to asses whether or not to enter into the arrangement. The Code also deals with dispute resolution processes and the termination of franchise agreements. Most franchises will also involve the franchisee having to enter into a Lease over commercial or retail premises. It is therefore important for a prospective franchisee to carefully consider the franchisee’s disclosure document, the franchise agreement, the Franchising Code of Conduct and any associated Lease before entering into the transaction.