Franchising

What is a franchising

Franchising is an increasingly popular way of growing businesses and with the right controls in place, it opens up huge opportunities for everyone involved.

The trend for businesses to choose franchising as a cost-effective means of expansion has grown considerably over the last 30 years. Once mostly limited to fast-food restaurants and hotels, franchising has expanded into all business sectors, opening up new forms of product and service distribution. The concept of franchising is founded on the idea that a good business model can be replicated again and again. A business which has an established brand and is looking to expand its markets, or simply exploit its valuable Intellectual Property (IP), can sell licences.

Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade as their own businesses under the brand of the franchisor, following a proven business model. The franchisee also receives a package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis (including a predetermined agreement length, with renewal options).

Helping you grow your business

We work closely with our clients to ensure that we meet their expectations both in terms of their objectives for a particular piece of work and in relation to costs. We provide pragmatic and robust advice to a range of businesses on both project delivery and operational requirements in the franchise sector. We understand the challenges faced by businesses operating in the current landscape of the franchise sector and the steps that businesses can take to mitigate their risks and make the most of the opportunities that are presented to them.

We are easy to deal with, clear in our advice and understand that a common sense approach is often required. As standard practice, we give our clients an estimate of the costs involved in undertaking any piece of work at the outset. We will draw up comprehensive franchise agreements and franchise renewal agreements and advise on franchise management strategies. We also advise on the IP aspects of the sale of franchise businesses or shares in franchises.

FRANCHISORS

If you have a successful business that you believe offers a business model that is appropriate for franchising or simply have an idea for a pilot scheme that you would like to franchise in the long term, then it is important that you get the right advice and assistance at the outset to give your new venture the greatest chance of success. We advise new and established franchisor networks on augmenting and updating their contractual models to ensure protection of their reputation and brand, commercial materials, business assets and data and revenue streams, as well as legal compliance and commercial robustness generally.

Advice to franchisors:

Auditing franchise recruitment material – to reduce the risk of mis-selling and/or breach

Franchise disputes

Compliance issues and obtaining payment

IP and brand protection

Territorial rights and internet selling

Advising on renewal

Sale of franchises and associated documentation

Termination of franchises

Injunctions to seek compliance of restrictive covenants

Drafting and advising on franchise agreements and related contractual documentation

FRANCHISEES

We offer support and guidance to businesses looking to enter into new franchise networks and existing franchisees looking to exit a franchise network.

Advice to franchisees:

Pre-contractual recruitment material and financials

What does the contract mean

Disputes, payment and franchisor’s obligations

Termination, negotiating and drafting termination documentation

What happens after termination

As our lawyers work for both franchisors and franchisees, they understand the respective needs, viewpoints and bargaining positions of the two parties involved in any franchise deal.

FRANCHISE SECTOR LENDERS

We support lenders looking to provide funding to franchise businesses seeking to grow their offering. We utilise our sector specialist knowledge to identify key risks for lenders operating in the franchise sector so that they can take steps to mitigate their risks pre-funding.

For more information on how our Lawyers can assist you, please call 70002204 for Cyprus, +35797793528 from abroad or contact us via our online form for a guaranteed response.