Are you buying or setting up a new franchise in Perth or Western Australia?

Call Irving Law, Commercial Lawyers and Solicitors, on 0449-865-807

If you are buying a new business, including a franchise, it is important for you to understand your risks and obligations. Only by knowing these things can you take adequate steps to set up a compliance system to protect you from defaulting under your franchise agreement

Need legal advice about a franchise agreement?

IRVING LAW, Perth’s small law firm for small business owners, helps clients review franchise agreements, business sale agreements and leases.

Buying a franchise business can be a complex experience. Franchise agreements are usually packed with clauses about intellectual property, marketing, tied supply arrangements, and much more. There is also the disclosure document, which can be as long or even longer than the agreement, and possibly also a business sale agreement (if it is an existing business) and on top of that a commercial lease and disclosure statement. That is a huge amount of legal documentation, especially for a first-time business owner. Let us assist you navigate through the legal paperwork jungle.

Buying a franchise in Western Australia?   Don’t overlook legal problems that could mess up your plans!

Are you concerned about any of the following issues? (And if you’re not, take a hint: maybe you should be.)

  • What restrictions will apply to you after the business is sold?
  • What happens when the agreement comes to an end,? For example, do you have to sell your equipment to the franchisor, and if so, at what price?
  • Is the franchisee allowed to terminate the franchise agreement at all, or to transfer it to a buyer of their business?
  • Can the franchise agreement put you in conflict with your landlord? For example, does the franchise agreement say you must erect signs, but does the lease say you can’t do that without the landlord’s permission? What happens if the landlord refuses?
  • Can the franchisor compete directly with the franchisee?
  • How is the franchise territory defined, and does this result in artificial competition with other franchisees?
  • Is the range and size of fees being paid to the franchisor acceptable?
  • What are your marketing obligations? Is there a marketing fund for the whole franchise system?
  • What happens if the manager of your business dies or becomes incapacitated?
  • Is the business is subject to performance targets, and what happens if there is a downturn in business?
  • How do the guarantee clauses work?

The wrong time to find out that your franchise agreement is unfair, or too restrictive, is after a problem arises, maybe many years after you signed it. Don’t be caught by surprise. Find out exactly what is in the agreement, and whether it poses unacceptable risks, before you sign it. Get assistance to negotiate with the franchisor while you still have a good opportunity to do that.

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Franchise businesses pose special problems. We have expertise in advising franchise owners.

You might like our Ebook for business owners written in plain language: Franchising Law (Australia)

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