Franchising is used to describe a number of business models, the most commonly identified of which is “business format franchising” where the franchisor markets a service, or a product, under a common name and standardised system, through a network of franchisees.
Franchising is a way to scale a business once it is successful and proven. It involves finding franchisees with the skills necessary to operate branches of the same business.
You can franchise almost any type of business. Under a franchise, the owner (franchisor) retains control of the brand and licenses (that is, grants permissions to) the franchisee to use its successful business model and brand. In exchange, the franchisee puts up the initial capital for the business, helps to promote the brand and pays a licence fee. The franchisor supports its franchisees by providing training, know how, marketing and other resources and skills.
Licensing of intellectual property (IP) is at the heart of a franchise contract. So, in fact, a franchise includes licensing. Typically, this will cover know how and other confidential information, trademarks, logos and designs, and copyright materials. For some businesses there may be patents, too.
In Australia, the Franchising Code of Conduct provides the most stringent national regulations for franchising introduced anywhere in the world. The Code was primarily introduced to outline the rights and responsibilities of franchisors to franchisees including particular requirements for disclosure of information, the provision of a cooling-off period, and unconscionable conduct.
Franchising Code of Conduct and regulations associated with it. We can help you understand the complexities and obligations of franchising whether for the Franchisee or franchisor we can help simplify the process.
We can advise on all aspects of Franchising and assist you with:
- Preparation of New Franchise Agreements and Disclosure Documents;
- Existing Franchise Documents Review;
- Corporate Governance;
- Disputes & litigation;
- Intellectual Property;
- Ongoing Advisory & Support;
- Full Franchise Model Development;
- Ongoing Advisory & Support; and
- Franchisee Recruitment & Selection.
We welcome enquiries to determine whether your business is ready to and can be franchised, and in that time we can cover the marketing options, legal requirements, and explain the advantages and disadvantages of franchising. To schedule an initial consultation, call 1300 977 546.