If you own a successful yoga studio, you may be considering expanding your business. One way you can do this is by starting a franchise. By setting up your yoga studio franchise carefully, you can maintain control over how your franchises operate and still separate yourself from day to day management. This article will outline the legal issues you should consider if you decide to start a yoga studio franchise.
Protecting Your Brand
If you franchise your business, you allow other people to use your:
- business name; and
- business model.
These aspects of your business are all part of your intellectual property (IP). Your IP defines your business and your brand.
Prospective franchisees will be interested in joining your franchise if you can show them that using your brand will attract clients in their area. If you do not have an established reputation or brand, prospective franchisees will wonder why they should pay to use your brand instead of simply setting up their own business. This means that you should have a strong brand before you decide to franchise your business.
When you start a franchise system, you license your IP to other people to use. Make sure you have registered trademarks for your:
- business name;
- slogan; and
- any logos.
This protects your IP.
Registering a trade mark gives you exclusive rights to the use of the trade mark. You can allow your franchisees to use your trade marks in your franchise agreement. Your trade marks should be recognisable and distinct from other studios’ branding to help customers remember and refer your yoga studio.
Choosing Locations and Lease Arrangements
It is your responsibility to approve the locations of your yoga studios. Where you decide to open your yoga studios can be crucial to your success. The first few franchises that you set up can determine the long term success of your franchise, so it is important to get this step right. When researching potential locations, consider:
- the area’s potential client base;
- your ability to soundproof or otherwise fit out the premises; and
- any competition.
You should also decide who will hold the lease for your franchises. As the franchisor, you can:
- hold the lease yourself and issue a premises licence to the franchisee; or
- allow the franchisee to personally hold the lease.
Holding the lease yourself means that you have an additional level of control over the franchise. If you need to replace the franchisee, you can do so without consent from the landlord.
If the franchisee holds the lease personally, you will have less control over the location. However, if the franchisee decides to abandon the premises they will be responsible for covering rent, not you.
Should the Fit Out Be Consistent?
As a franchisor, you have substantial control over how franchisees set up your franchises. You can decide the extent and cost of the fit out. This may include:
- buying and setting up a reception desk;
- installing signage; or
- painting the walls a specific colour.
It is important to keep fit outs relatively consistent so that customers can identify your brand at every franchise. Every location will be slightly different, but as a franchisor, you can specify a particular set up to maintain a sense of familiarity across your franchises.
What Insurance Do I Need?
People may occasionally injure themselves in your yoga classes. It is essential that you limit your liability by making sure that each yoga studio franchise has the right insurance. You may need to obtain:
- general insurance; and
- income insurance.
In addition, public liability insurance reduces your financial liability in the event of:
- death or injury to third parties;
- property loss or damage; or
- economic loss due to negligence.
You can include a clause in your franchise agreement that requires your franchisees to have the correct insurance.
What Training Should I Offer Franchisees?
There are many different styles of yoga and yoga teaching. Your business has probably been successful because people enjoy your style of yoga and how you teach it. To maintain this success, you may need to provide regular training for your franchisees. You should specify all required training in your franchise agreement and maintain an ongoing program so that franchisees stay up to date with your preferred teaching style.
Deciding to expand your yoga studio into a franchise requires careful thought and planning. Before beginning the process, consider:
- whether you need to protect your business name, logo, and slogans by registering them as trade marks;
- where the yoga studio franchises will be located and who will be listed on the lease;
- what elements of your studio fit out should be consistent across different franchises;
- how you can limit your liability by obtaining public liability insurance and making it mandatory for your franchisees to also obtain insurance; and
- how to structure your training programs and maintain a consistent standard of teaching across your yoga studio franchise.
If you have any questions or need advice about setting up a yoga studio franchise, contact LegalVision’s franchise lawyers on 1300 544 755 or fill out the form on this page.
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