What are the requirements of the Franchisor?

If you are buying or selling a Franchise Business there are a number of matters you should consider before you enter into an agreement.

Does the Purchaser have to undergo a training course with the Franchisor?

  • If so who bears the cost of the training?
  • When is the next course available, as this will affect the time before the Purchaser can take over the business?

As a Purchaser;

  • Has a Disclosure Statement been provided by the Vendor?
  • What are the ongoing obligations of the Franchisee?
  • What ongoing fees are payable to the Franchisor?
  • What is the term of the Franchise?
  • Does this accord with the lease of any premises used?
  • Can other Franchises be granted and if so where?
  • Will this impact on the Business?
  • If it is a new franchise what additional investment is required by the Franchisee to setup the business, ie fit out costs equipment etc.

As a Vendor;

  • What are the requirements of the Franchisor to approve a transfer to the Purchaser?
  • When will the Purchaser’s training be completed and how long will the process of approval take?
  • What exit fees and costs are payable to the Franchisor on the transfer?

If you need advice in any of these areas contact Neville Windebank, an Accredited Specialist in Business Law, with more than 30 years’ experience to discuss the matter.

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