Franchisee law

 

There is no specific franchisee law or franchisor law, as there is in other contractual relationships. Franchises are governed by the same rules and laws as other business structures. Thus despite generally having weaker bargaining power in the franchise relationship, franchisees’ rights are not protected by any franchisee law. The franchise agreement is the central legal mechanism of the franchise relationship. To the extent that you as a franchisee have certain rights and obligations, it is from this document that they stem.

Franchise agreements generally tend to favour the franchisor. This is because it is the franchisor who drafts the agreement, using specialist franchise lawyers to suit their best interests, legally and financially. It is important before entering a franchise agreement that you, as a potential franchisee, also have a specialist solicitor to carefully review the agreement and consider the legal and financial implications of the terms, and to explain the rights and obligations that will flow once the agreement is signed.

Once you have entered the franchise arrangement, you may find that the reality of the franchise is not quite as you imagined it would be, or as the franchisor led you to believe. For example, the start-up costs involved in fitting out the business for opening may be substantially greater than forecasted; the customer-base may not be as large or stable as the franchisor may have represented; and the income you receive may be considerably less. In such situations you should seek the advice of a specialist franchise solicitor to ascertain whether such shortcomings are attributable to a breach of the terms of the franchise agreement by the franchisor.

Other more obvious problems may arise where you or the franchisor have clearly breached fundamental terms of the contract, such as the provision of supplies or training, or the payment of management service fees. In such situations, or in the event that you wish to exit the franchise, you should seek legal advice from a specialist franchising solicitor.

If you would like to obtain legal advice on franchisee law, Caven can put you in touch with a local specialist franchising solicitor free of charge. So, if you have any questions or would like our help in finding a local specialist franchising solicitor please call us on 08001 221 2299 or complete the web-form above.

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