Have you ever considered franchising your existing business? Perhaps your business has seen great success in your local community or you’re looking to expand into new markets. Franchising your business can be a huge and exciting step. Australia is one of the most franchised nations in the world and local startups such as Gelatissimo, Mad Mex and Coffee Club have seen huge retail success. To a successful business, choosing to franchise could be a very profitable decision and accelerate your business to the next level.

But before you jump to finding your franchisees, it is important that you consider the following steps when planning how to franchise your business. LawPath has experienced franchise lawyers who can help navigate you through the steps of franchising.

How to franchise your business?

Is your business suitable for franchising?

Before you decide to expand your business, you should consider whether your business is suitable for a franchise structure and/or able to be managed successfully. Does it require specialised skills or operational experience? Will you be able to efficiently resolve issues that the franchisee may encounter in the new business? Is the business flexible enough to adapt to different markets?

You will need to pilot test your business to ensure that it will run smoothly and profitably in a different setting or outlet. The pilot operation can also be used as a means to test out new business ideas before they are implemented by your actual franchisees.

Trademarking your franchise

When expanding your business, it is crucial that you are able to differentiate your business from other competitors within the industry. Be aware of potential copies of your products or services that may arise when your business develops a new franchise branch. You may wish to consider trademarking your brand or logo to identify your franchise and protect your brand integrity.

LawPath’s easy to use online trademark application can help you apply for a trademark for your franchise.

The Franchising Code of Conduct

When you are ready to draw up a franchise agreement with your franchisee, it is important to understand the legal obligations that are imposed upon you as a franchisor. The Franchising Code of Conduct is a mandatory industry code that regulates the relationship between the franchisee and franchisor. It provides rules and penalties for the parties’ conduct in a franchise agreement. Franchisors should be aware of the financial penalties and infringement notices that can result from serious breaches of the Code.

We advise you seek professional guidance from an experienced franchise lawyer when drawing up your franchise agreement to ensure that it complies with the Code.

Lastly

Choose your franchisees carefully and wisely. It is important to find the right person for the franchise and have a clear franchise agreement that both parties agree to before carrying out your business plans. Having a franchise lawyer guide you through the process can help you minimise conflicts and uncertainties that may arise during the course of your franchise expansion.

Looking to franchise your business? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

Jennifer Wang

Jennifer is a Paralegal, working in our content team, which aims to provide free legal guides to facilitate public access to legal resources. With a keen interest in media and IP law, her research focuses on the evolving role of the law to navigate new and emerging information platforms.