Franchising is a popular business model in Australia, where the franchisee buys the rights to operate a business using the name, brand, product and services of an already established business.
In return, the franchisor provides resources and support to each of the franchisees.
Turning your business into a franchise can be a long and overwhelming process, so it’s important you take the time to plan everything in detail.
As a franchisor, there several laws you must follow in Australia, including:
· The franchising code of conduct
· Australian consumer law
· The Fair Work Act
· Contract law
All franchisors must also create a franchise profile and publish key disclosure information about your franchise on the Franchise Disclosure Register.
Creating and maintaining a public presence on the Franchise Disclosure Register is part of complying with the Franchising Code of Conduct.
Before starting a franchise, you must first have an existing business you want to scale up, and you should be able to demonstrate the success of that business.
It’s important to consider your long-term goals – including how many franchises you would like – as well as knowing your customer base, the locations you’re considering, and the costs involved.
Do your market research and think about who your competitors are, if there are similar franchises to yours, and what is the point of difference you offer.
You must provide potential franchisees with particular documents and information, including:
· an information statement – a document explaining franchising
· a copy of the franchise agreement – this says what you and the franchisee have agreed to do and not do
· a disclosure document – this tells the franchisee important information about you and franchise
· a key facts sheet – that helps the franchisee understand the disclosure document
· a copy of the Franchising Code of Conduct – one of the laws that franchisees and franchisors must follow.
Need Assistance?
The legal steps involved in starting a franchise can be complex and it’s important that you seek legal advice. Here at GLG Legal, we are the experts on all aspects of franchising. To make an appointment with one of our solicitors, call our office on: (07) 3161 9555 or email: info@glglegal.com.au
