You may be an animal lover with a pet care shop, but are you ready for the business challenges that come with a pet care franchise? To ensure that your business is purr-fect to expand into a franchise, it should be successful, distinctive and replicable. A pet shop that is distinguishable from similar businesses assists in attracting and maintaining customers. Further, a business that is distinctive and successful may encourage potential franchisees to support and enter your network. Your business model must also be replicable to ensure that it is successful in different locations and that expansion is both effective and efficient. This article sets out some of the legal issues to consider when setting up a pet care franchise.

Lease

As the franchisor, you are responsible for approving the location of your pet care franchises and deciding whether or not you will hold the lease. While holding the lease increases your control, it also increases your liabilities. If you hold the lease, it is easier to transfer the franchise between different franchisees because you do not require consent from a landlord. However, you are also liable for any unpaid rent if the franchisee abandons the franchise.

Fit-Out of a Pet Care Franchise

Franchisors are also responsible for the fit-out of their franchises. The fit-out may include buying and setting up equipment. For example, you may wish to set up shelving for storage, animal cleaning equipment and animal housing areas. You can decide on the extent and the associated costs of the fit-out. It is important to consider how much you plan on expanding, as the number of pet care franchises may affect how much you are willing to spend on the fit-out. The fit-out may also affect the lease in the future, especially if, for example, furniture was bolted to the floor and became a fixture.

Systems and Training  

When a franchisee buys a pet care franchise, they purchase your business system and receive access to training to understand how the business operates. The training program depends on the franchise but usually involves some form of in-person training. You should ensure your training provides franchisees with the opportunity to understand and learn more about the franchise to ensure consistency across the network.

Trade Marks

Your business name, logo and any slogans are valuable business assets and form a crucial part of your franchise brand. Customers recognise and remember your brand through these marks. Consequently, these assets contribute to the success of your business. To protect your brand, you should register them as trade marks before you take on any franchisees. Registered trade marks provide you with exclusive usage rights. You can then allow your franchisees to use your trade marks through a licence.

Regulation Compliance

Depending on the location of each pet care store, state regulations will govern your franchises. It is your responsibility to ensure that all of your franchisees are compliant with the relevant legislation. Implementing specific business practices can assist in this. In New South Wales (NSW), for example, the NSW Government outlines regulations for the grooming and boarding of cats and dogs. If you offer different services within your pet care business, there may be various regulations for each of those services. Therefore, it is best practice to seek regulatory advice before starting a pet care franchise.

Insurance

It is important to ensure that each pet care franchise obtains the correct insurances to limit your liability. You may need to obtain general insurance (for the fit-out) and income insurance. In addition, public liability insurance is particularly useful in reducing your financial liability in the event of:

  • death or injury to third parties;
  • property loss or damage; or
  • economic loss due to negligence.

As the franchisor, you can make it mandatory for your franchisees to obtain insurance by including such a clause in your franchise agreement.

Key Takeaways

Having a business model that is successful, distinct and replicable is helpful when setting up a pet care franchise. You should ensure that you register your name, logo and slogans as trade marks. You should also provide your franchisees with business systems and training for consistency. It is also necessary to comply with any regulations related to the services you provide in your pet care franchise. Finally you should limit your liability by obtaining appropriate insurances.

If you have any questions or need advice on setting up a pet care franchise, get in touch with LegalVision’s franchise lawyers on 1300 544 755 or fill out the form on this page.

Matthew DeRusha
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