Legal Aspects of Franchising

Our dedicated franchise solicitors are highly experienced in all legal aspects of franchising, including franchise agreement law and franchise protection laws. As a result, our franchise solicitors can pre-empt many of the problems that can arise for franchisors or franchisees, and provide commercially-focused advice.

How can Newtons’ franchise solicitors help?

At Newtons, our franchise lawyers have a deep knowledge in the field of franchising law, but we know that understanding you as a businessperson, your franchise and your industry comes first in order to provide tailored, commercially-focused legal advice.

We have extensive experience in franchise law, and have supported franchisors and franchisees in a variety of industries. 

The legal aspects of franchising we specialise in include:

• Reviewing, preparing, negotiating and updating franchise agreements
• Advising franchisees and franchisors on franchise documents, including commercial leases and deposit agreements
• Intellectual property protection and control, including trademarks and social media provisions in regards to branding
• Commercial property legislation and issues
• Employment law, including employment and franchise renewals
• Sales, acquisitions and disposals of franchise shares and businesses
• Commercial disputes between franchisee and franchisor, including intellectual property disputes and contract disputes
• Franchise network development
• Customer data protection when a franchise ends

What is a franchise agreement?

A franchise agreement is a legally binding document that establishes the terms of the relationship between the franchisor and the franchisee. This is the most important document in a franchise relationship because it sets out both parties’ legal rights and obligations. Examples include territorial rights, ongoing fees and marketing obligations.

Franchising can be a fairly risk-free way to start a business, enabling parties to become self-employed, who might otherwise find themselves unable to do so. For franchisees, the opportunity to profit from a proven business model (with a known name and reputation) can be a huge benefit. Similarly, many franchisees will benefit from an established franchisor support system and shared advertising benefits.

However, a franchisee must exercise caution when entering into a franchise relationship; the appeal of “ready-made” earning potential can be quickly diminished by the royalties which have to be paid to the franchisor, and (dependent on the nature of the franchised business) franchisees may also incur a mark-up in goods or services received from the franchisor or their nominated supplier).

A franchisee may also find itself subject to restrictions on its ability to sell or transfer the franchised business. For this reason, it is vitally important for franchisees to obtain legal advice before entering into a franchise agreement.

In short, franchise law is complex, with multiple key legal areas to consider, and franchise agreements typically cover many different legal aspects of franchising. This is why we advise you to contact an experienced franchise agreement solicitor. At Newtons, our franchise team can assist you with negotiating, drafting and executing a franchise contract that protects your interests. We will outline your rights, obligations and expectations and ensure this has been appropriately documented in the agreement. In addition, we can provide franchise legal advice to assist you with franchise agreement dispute resolution effectively.

If you are interested in seeking legal advice for other corporate agreements, Newtons’ solicitors are well-versed in the legalities of a range of agreement types.

Franchise protection laws

Franchising your business comes with a number of advantages. For example, it can allow a speed of expansion which would not be achievable by the franchisor going it alone, and it can allow expansion without the risk or outlay of significant capital investment.

A franchisor can also benefit from the opportunity to reduce costs (e.g. by achieving bulk buying discounts) and can benefit from the spreading of risk which franchising affords.

However, franchising is not without its disadvantages, and the risks of loss of control, the need to divulge confidential information and know-how, and the franchisor’s potential liability to its franchisees, are all common areas of concern.

We understand the importance to you, as a franchisor, of protecting your business both during and after a franchise agreement, and our experienced franchise solicitors know how best to protect you, in accordance with franchise protection laws. We are alive to the risks of franchising your business, so we can help you take the appropriate steps to safeguard your business legally.

One of the most critical elements of franchise protection law is intellection property, so it is vitally important that you carefully record the creation of your intellectual property and, where appropriate, register its existence in order to protect against others benefitting unlawfully from what belongs to you. Our franchise solicitors can guide you through this process and tell you exactly what you need to do in order to protect your intellectual property before franchising your business.

When a franchise agreement terminates, we can also help you to legally challenge a franchisee who tries to continue using your intellectual property without consent.

Contact Newtons’ franchise solicitors

The franchise law team at Newtons are highly experienced in all areas of franchise law. We’ll help you understand your rights, pre-empt any threats and rigorously protect your business. Alternatively, if you are coming out of a franchise, we can advise you on the steps that you can take to reduce the risk of a claim for breach of the franchise agreement and intellectual property rights.