Philip Astles, Managing Partner of Kidd Rapinet solicitors in Slough, specialises in all aspects of Commercial Law. Here he explains a commonly asked question “What is a Franchise Agreement?” A Franchise Agreement is essentially where the Franchisor who owns a brand, gives someone else the rights to run a business using their brand. This makes them the Franchisee. There are various rules contained in a Franchise Agreement stating how the brand is to be used in the business and how long the agreement will last. The agreement will probably also state that the area that you have agreed upon will not have other Franchises using that brand in the same area.

1. Philip Astles, Managing Partner of Kidd
Rapinet solicitors in Slough, specialises
in all aspects of Commercial Law. Here
he explains a commonly asked
question “What is a Franchise
Agreement?”
A Franchise Agreement is essentially where
the Franchisor who owns a brand, gives
someone else the rights to run a business
using their brand. This makes them the
Franchisee.
There are various rules contained in a
Franchise Agreement stating how the brand is
to be used in the business and how long the
agreement will last. The agreement will
probably also state that the area that you
have agreed upon will not have other
Franchises using that brand in the same area.
Philip Astles
What is a Franchise Agreement ?
Slough office contact details: Kidd Rapinet
Parliament House, St Laurence Way, Slough, Berkshire, SL1 2BW
From within the UK: 01753 439089
From Overseas: +44 (0) 1753 439089
FAX: 01753 820501
DX: 42269 Slough West
Main Kidd Rapinet Website
Listen To The FULL Live Interview

2. When you look into a Franchise Agreement it is essential that you
ask for a copy of their standard Franchise Agreement form. This
will give you the opportunity to get an experienced solicitor in this
field to look at the contract before committing yourself and parting
with any money, as any money you put in will not be reimbursed.
Although the Franchisor will state that a Franchise Agreement will
be prepared for you, note that you will be charged for this. Your
solicitor can assist you in what should or needs to be changed in
the agreement to protect your rights.
You need to keep in mind that the Franchisor will not accept many
changes, typically up to 5. They may decide not to have you as a
Franchisee if you request to make too many changes.
So it is important that you and your solicitor prioritise the changes
that you feel are most essential and that gives you the most
protection.
What also must be taken into consideration is that if you wanted to
hire a Manager to run the business, they would have to be
approved and trained by the Franchisor.
However if they don’t like your choice of Manager they will not let
you employ them.
Philip Astles
Slough office contact details: Kidd
Rapinet
Parliament House, St Laurence Way,
Slough, Berkshire, SL1 2BW
From within the UK: 01753 439089
From Overseas: +44 (0) 1753 439089
Main Kidd Rapinet Website
What is a Franchise Agreement?
Visit My Blog
www.kiddrapinet-slough.co.uk

3. Even if you have been successful in making reasonable profit and
complying with all the rules and regulations within the Agreement,
it doesn’t give you any right for an automatic renewal when your
Agreement ends.
You can have a provision in put in place stating that the Franchisor
can’t unreasonably refuse a renewal if you have complied with all
the terms and turned over a reasonable profit expected for that
area.
This provision will prevent you from being in a situation where you
have built up a valuable Franchise and then the Franchisor refuses
to renew the agreement to then sell it to someone else for a
premium amount as a result of your success in building good
customer base.
It would be seen as fair if the Franchisor decided not to renew your
Agreement if you have not been turning over reasonable profits
and haven’t complied with all the terms set out in the Agreement.
Ultimately the Franchisor needs and
must protect their brand!
Philip Astles
Slough office contact details: Kidd
Rapinet
Parliament House, St Laurence Way,
Slough, Berkshire, SL1 2BW
From within the UK: 01753 439089
From Overseas: +44 (0) 1753 439089
Main Kidd Rapinet Website
What is a Franchise Agreement?
Visit My Blog
www.kiddrapinet-slough.co.uk

4. There is also likely to be a 3-6 month trial time set in the
Agreement. This is to allow either party to exit the Franchise
Agreement if they’re not happy by giving an agreed amount of
notice.
Essentially you need to be satisfied with the Franchise; you need
to establish a sound working relationship with the Franchisor.
If not then you need to think about whether this deal is the right
deal for you.
It is highly recommended that you should always seek advice from
a solicitor before committing yourself to any Agreement or parting
with money.
This will ultimately increase your ability to make the relevant
changes needed and also give you the opportunity to walk away
before committing yourself financially.
If you would like to discuss how to legally set up a Franchise or are
thinking of buying into one, please call me, Phil Astles, at Kidd
Rapinet solicitors on 01753 532 541 or arrange a call back
arrange a call back
Philip Astles
Slough office contact details: Kidd Rapinet
Parliament House, St Laurence Way, Slough, Berkshire, SL1 2BW
From within the UK: 01753 439089
From Overseas: +44 (0) 1753 439089
FAX: 01753 820501
DX: 42269 Slough West
Main Kidd Rapinet Website
What is a Franchise Agreement?