Franchises

According to British Franchise Association

Only 4% of Franchises fail which is significantly less than the rates applicable to individual entrepreneurs.
Franchising is not the panacea for all business and is not a guarantee of success for franchisors who have adopted it to market their packages.
It can be a vulnerable situation where there are high demands on both the franchisor and the franchisee.

Concept

The basic concept of the Franchise must a good one if it is to succeed and the Franchisor must have sufficient resources to support their chain and the Franchisee must be properly managed.

Law

The Franchise Agreements are lengthy documents which set out the rights, responsibilities, lengthy terms, and perimeters.

Our Vision

Both the Franchisor and the Franchisee will have to carry out their due diligence. Our goal is our Clients success and future growth.

Are you a Franchisor ?

The main Advantage to the Franchisor

The franchisee allows the franchisor to increase his number of outlets with minimum capital outlay and so accelerate the network’s growth and its profitability. As the franchise network grows it will become easier to handle national or regional customer accounts.

The Disadvantage of Franchising to the Franchisor

The franchisor  has to control and co-ordinate a network of semi-independent businessmen and ensure that they build and maintain a favourable image for the whole franchised operation. The policing and monitoring of standards by the franchisor is vital but at times can be difficult. The franchisor will at times have to resort to the use of both carrot and stick to get franchisees to try new techniques or improve their current performance. Ensuring that franchisees do not under report their turnover is also a major task. The dynamics of the franchisor-franchisee relationship are such that a lack of trust will on occasions creep in, making life more difficult than it should be. This may be because of ‘personality’ clashes between the franchisee and members of the franchisor’s team or because the franchisee realises that he or she does not find it easy to live within the restraints imposed by a franchise. Conflicts between the franchisor’s corporately owned outlets and those owned by franchisees may occur. It is the franchisor’s duty to remove or minimise these conflicts and ensure that they are satisfactorily dealt with. An individual corporately owned outlet will be more profitable for the franchisor than an individual franchised outlet, although the increased number of franchised outlets will probably mean that the franchised business as a whole will be more profitable than one that is entirely corporately owned.

Are you a Franchisee?

Facts for Franchisee to understand

The franchisee is the proprietor of his own business and owns the tangible assets of the franchise outlet. What he does not own is the goodwill. Like any other business proprietor, the franchisee buys materials, pays rent and staff salaries and takes the profit of operation, less royalty and service fees. Subject to various restrictions, he can sell his business when he wishes (usually subject to the franchisor’s pre-emption right and on condition that the purchaser is approved by the franchisor). What makes the franchise different from any other business is that it gains from the franchisor the entire business concept with full training, assistance in every aspect of setting up and running the business, and access to necessary materials and supplies. In essence, it can be said that the franchisee does not have to worry what to do or how to do it, but merely follow the developed concept. The franchisees’ start-up costs entail more than paying the franchisor an up-front fee; he must invest in premises, fittings, equipment, materials and working capital until the inward cash flow commences. In addition, he must make regular payments to the franchisor in the form of royalties or management service fees or, in some cases, an agreed mark-up on supplies obtained from the franchisor.

Franchisee’s general enquiries and considerations

  • Is the Franchise based in the UK?
  • Is the Franchisor a member of the British Franchise Association (the BFA) or the International Franchise Association?
  • Does the Franchisor hold the intellectual rights?
  • What will be the result (in respect of that licence or any other document, agreement or arrangement) of the insolvency of the licensor or the franchisor?
  • If the Franchisor has provided detailed of the financial projected information- what was this based?
  • Have those figures been calculated with reference to the actual performance of a franchised or company-owned business?
  • If so over what period of time?
  • Was it a business of similar size and location to the proposed business of the franchisee?
  • Do the figures represent trading once the business has achieved maturity or take into account start-up and development time ?
  • What is the percentage of the royalties and service charges that must be paid?
  • Will the Franchisor allow a successor to the business?
  • How accurate have the projections of the franchisor been in the past?
  • How many franchisees have been obliged to put more money into their businesses due to shortfalls between actual and projected performance and in what circumstances?
  • What has been the average additional injection?
  • What experience and expertise does the Franchisor/Franchisee have?

Our Franchise Service Prices

Line

Basic Plan

£7,000

  • Drafting
  • Advising on the franchise agreement
  • Responsibilities
  • Liabilities
  • Partnership Agreements

Standard Plan

£10,000

  • Drafting
  • Advising on the franchise agreement
  • Responsibilities
  • Liabilities
  • Drafting a lease or advising on any lease
  • Rent deposit Deed
  • Registering  with the Land Registry

Business Plan

£15,000

  • Drafting
  • Advising on the franchise agreement
  • Responsibilities
  • Liabilities
  • Drafting a lease or advising on any lease
  • Rent deposit deed
  • Registering with the land registry
  • Partnership agreement

Professional Plan

£20,000

  • Drafting
  • Advising on the franchise agreement
  • Responsibilities
  • Liabilities
  • Drafting a lease or advising on any lease
  • Rent deposit Deed
  • Registering  with the land registry
  • Partnership Agreement ,advice for 6 months thereafter
  • Bonus- discount on any dispute resolution,