Franchisors
McColm Matsinger Lawyers are a Sunshine Coast based law firm with franchisor clients all over Australia. Our lawyers are experts in drafting disclosure documents as required by the Franchising Code of Conduct and plain english franchise agreements. We can help you with the set up structures and protecting your valuable Intellectual Property to ensure the basis for a sound franchise system into the future.
The nature of a franchise can be described as:-
“A franchisor, holding property rights over a marketing system, business service or product (identified by a brand name or trade mark) enters a contract or agreement with the franchisee and grants, under certain conditions, the right to use a business brand name or trade mark and the right to produce or distribute the franchisor’s product or service.[1]”.
There are a diverse range of franchise systems in Australia encompassing many different industries and businesses of all sizes, and there is undoubtedly still much growth to come in the Franchising sector.
If you are considering franchising you need to ask yourself several questions
Do you have a business that:
You need to be franchising a proven system, not simply a great idea or concept which hasn’t been proven or is just a fad.
Your concept needs to be unique and provide Franchisees with a competitive edge by use of a distinctive brand and image.
Your system needs to have staying power and be more than a passing fad with a limited lifespan.
The business has to be financially viable after payment of ongoing royalties and marketing fund contributions.
Franchisees need to be taught how to use your system or method of doing business. It is essential that your system and business methods can be replicated. Your business requires development of a detailed Operations Manual.
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Do you have what it takes to Franchise?
This desire is best based on your confidence in your business and a vision for growth which need to be matched by your commitment to make it happen.
Franchising can reduce the risks of entering into business but it certainly does not eliminate them.
The best foundation that you can lay is developing a sound franchise system. To achieve quality and a business that is sustainable for both parties, i.e. the Franchisor and the Franchisee, you need to be focussed and prepared to invest a significant amount of time in establishing your franchise system (at least four to six months).
You also must be prepared to invest enough capital to ensure that all facets of your business are properly developed and systemised, and ready to be franchised.
The Key Steps in Developing a Franchise System Include:
Key decisions need to be made early in the development of your franchise strategy, and you will need to source expert advice from industry consultants experienced in franchising including Business Advisors, Accountants and Lawyers.
You need to consider your ability to recruit, train and motivate your Franchisees. Careful selection of Franchisees is imperative if the network is to grow and prosper. You need to be able to communicate effectively and develop relationships with all different sorts of personality types. When developing your franchise system, there is a wealth of sources of information available. You cannot read too many books on Franchising and business, or talk to too many existing Franchisors and Franchisees about their experiences. Visit the Franchise Council of Australia website at www.franchise.org.au and the publications section for some valuable resources on franchising your business.
The keys for the successful franchising of a business are “to make haste slowly” and “if it’s worth doing, its worth doing properly”.
[1] The 1997 House of Reps sector. Standing Committee on Industry, Science and Technology, Finding a Balance: Towards Fair Trading in Australia, AGPS, Canberra. May 1997
