Skip to content

What are my responsibilities as a franchisee?

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.

Register for our free webinars

ACCC Merger Reforms: Key Takeaways for Executives and Legal Counsel

Online
Understand how the ACCC’s merger reforms impact your legal strategy. Register for our free webinar.
Register Now

Ask an Employment Lawyer: Contracts, Performance and Navigating Dismissals

Online
Ask an employment lawyer your contract, performance and dismissal questions in our free webinar. Register today.
Register Now

Stop Chasing Unpaid Invoices: Payment Terms That Actually Work

Online
Stop chasing late payments with stronger terms and protections. Register for our free webinar.
Register Now

Managing Psychosocial Risks: Employer and Legal Counsel Responsibilities

Online
Protect your business by managing workplace psychosocial risks. Register for our free webinar.
Register Now
See more webinars >
Lachlan McKnight

Lachlan McKnight

CEO | View profile

Lachlan is the CEO of LegalVision. He co-founded LegalVision in 2012 with the goal of providing high quality, cost effective legal services at scale to both SMEs and large corporates.

Qualifications: Lachlan has an MBA from INSEAD and is admitted to the Supreme Court of England and Wales and the Supreme Court of New South Wales.

Read all articles by Lachlan

About LegalVision

LegalVision is an innovative commercial law firm that provides businesses with affordable, unlimited and ongoing legal assistance through our membership. We operate in Australia, the United Kingdom and New Zealand.

Learn more

We’re an award-winning law firm

  • Award

    2025 Future of Legal Services Innovation Finalist - Legal Innovation Awards

  • Award

    2025 Employer of Choice - Australasian Lawyer

  • Award

    2024 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2024 Law Firm of the Year Finalist - Modern Law Private Client Awards

  • Award

    2022 Law Firm of the Year - Australasian Law Awards