As a franchisee, your level of experience in running a business might be quite developed, but this is not always the case. The majority of new franchisees fail in their first two years. At times this is due to the franchisees being inexperienced and unaware of the factors that need to be considered when running a business or can simply be a result of unforeseeable market conditions.As a franchisee, your main goal in the initial stages of owning the franchised outlet is to survive. The entitlement to use the image(s) and system(s) of a well-established brand is the key factor that ensures the survival of the franchisee in the first few years.

It is important to remember that, although you are running the franchise as if it were your own (and for most intents and purposes, it is), you are still employing the registered trademarks of the franchisor and applying the valuable trade secrets to your business practices. You are in charge of how, where and when this image and branding are used. You are in charge of the selection of potential employees and their training but the franchisor is also required to provide ongoing support and assistance. This ongoing support is part of their responsibility to you, so use it to your advantage! Ask them to give you advice on how to recruit quality staff and on the systems that are currently in place for training these employees.

It is essential that the franchisor be engaged if advice is required but ultimately the management of the franchised outlet is the franchisee’s responsibility. The operations manual of the franchisor should be utilised at every opportunity in order to gain a better understanding of the franchisor’s expectations on running the business. A well-run franchisee (in the eyes of the franchisor) is one that replicates and mirrors other franchised outlets in the network.

These services (training, advertising, advice) are, to an extent, standard in all franchise agreements. Despite this, the degree to which these services are provided by the franchisor will depend on the terms of each franchise agreement. In the franchise agreement it should stipulate how much support the franchisee will receive in terms of marketing and other expenses. If the franchisee wishes to obtain the most favourable franchise agreement possible, the services of a franchise lawyer should be engaged.

From the outset, keep in mind where you stand as a franchisee and understand the responsibilities, obligations and overall scope of your role. Keep in mind that you, as a franchisee might feel like a partner to the franchise (with an interest in the company) but in fact a franchisee possesses no equity in the franchise and is not a partner. Naturally, as a franchisee, you will have some influence in the day-to-day running of the business but your say/views will in fact have little authority.

Conclusion

If you are a franchisee for a larger and well-established company, it is probable that you will have access to a Franchise Advisory Council who can represent your interests.

If you require any legal advice regarding your responsibilities as a franchisee please contact LegalVision on 1300 544 755 and speak with one of our experienced franchise lawyers.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

RSVP for our August 26 webinar:
Tips for Managing Your Business' Cash Flow During COVID-19
LegalVision, in partnership with Grant Thornton, is hosting a free webinar to help businesses navigate the cash flow challenges arising from the COVID-19 pandemic. You will learn about the most important business metrics to keep an eye on during COVID-19, how to manage your cash flow and strategies to access cash during an economic downturn. Register for free now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Lachlan McKnight
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy