Reading time: 3 minutes

Fitness and nutrition are big business in Australia. From the Michelle Bridges to those rugged ex-My Kitchen Rules blokes, it pays to be in the know on all things health. If you successfully run a fitness or nutrition business, it’s only natural you will want to expand and spread the healthy word beyond your own business’ capacity.

In essence, a licence is a right to use and applies to the intellectual property (branding, copyright and trademarks) and the systems (i.e. the processes in place behind your “get fit quick” program). Licensing also limits your ability to place conditions on that right – something businesses typically overlook when seeking to expand. 

Whether you’re a yoga studio, an outdoor boot camp or a health and wellbeing spa, if you’re thinking of expanding but are unsure whether to licence or franchise, we set out some points for you to consider. 

1. Do You Want to Implement Systems?

Do you want to dictate the precise methods and systems implemented across the brand? For example, do you want to dictate how classes are run or transactions concluded? If you’ve developed, for instance, Yogalates or a specialist Power Zumba machine, chances are you’ll want that precise model replicated in any other branches of your business. If so, this is more indicative of a franchise relationship.

2. Do You Want Common Marketing?

If it’s your plan to run common marketing campaigns to which all business owners contribute and benefit, this is more indicative of a franchise relationship. 

3. Do You Want to be Able to Monitor and Regulate Performance?

It’s often important, for the purpose of maintaining the integrity of your brand, to put in place minimum KPIs and, further, be able to enforce them. If this is an important aspect of your proposed growth, a franchise will likely be the way to go.

4. How Much Interaction Do You Want Between Businesses?

As a franchisor, you will have obligations regarding ongoing training and monitoring which, of course, takes time. Do you have the capacity and willingness to do so? Do you have the experience and business acumen to analyse financial performance and/or provide coaching and training to individual business owners? If you intend to retain your existing business but provide others the opportunity to exploit your systems and intellectual property, you should think about the additional burden this will impose on you as a franchisor. 

5. Have you Thought About the Legal Ramifications?

The legal side of setting up a franchise and licence is very different. What’s more, operating a franchise under the guise of a licence agreement can have negative ramifications in the long run. Talk to a franchise or commercial lawyer to understand the difference in documentation and ongoing legal compliance.

***

Whichever model you propose to adopt, it’s important that you understand the legal ramifications from the outset. If you have any questions about the differences between licencing and franchising, and what they will mean for you and the growth of your business, get in touch with our franchise team.

Webinars

Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

Online
If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Online
Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Online
Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Online
Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Online
Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Online
Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Online
Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

Online
As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards