OCTOBER 23, 2012

Franchising Opportunity

In December 1827 the American author, Charles A Goodrich coined the motto which is now popularly quoted as “a place for everything and everything in its place”.   In doing so he was merely drawing on the pre-existing idea that there is a natural order and size for everything and to go against that order is to invite trouble.  The same is true in business where pitfalls await those trying to expand a business too fast or attempting to expand beyond a natural size.

When considering business expansion, one option which is far too frequently ignored is that of franchising.  Bringing your business or idea to the market place by way of a franchise can enable the business and brand to expand rapidly without the attendant cost and staffing implications.  Although the British Franchise Association (BFA) warns that not all businesses are suitable for franchise, the franchise model does work for a wide range of businesses.

Successful business franchises are based upon a robust business model supported by a comprehensive franchise contract.  Whilst franchising brings many benefits, the franchisor is partially handing over their reputation and their brand to others and this can have implications for the business as a whole.  This means that a franchise agreement cannot be written on the back of an envelope but will require specialist franchise contract review advice from a franchise solicitor who has a deep understanding of the law as it applies to franchises together with a strong grounding in business processes.

It is only when something goes wrong that the true nature of an enterprise is revealed.  Good franchise agreements are as much designed to pre-empt trouble as they are to act as a rule book. Franchise agreement reviews are an important part of the process of ensuring that the franchisee is fully aware of their obligations under the franchise contract.

From a franchisor’s viewpoint the potential to be gained by way of rapid business expansion, income growth and the spread of risk is a heady mix.  Similarly a potential franchisee can easily succumb to the temptation of an existing business model, strong brand and business support from the franchisor.  A franchise contract review will add a layer of reality to a rose tinted viewpoint.

Those who take the franchise route have the potential to grow their business far beyond the natural size for a single outlet.  So maybe we need to modify Goodrich’s motto to read “a place for everything and everything in its place, unless you franchise”.

How can we help you?

Goldstein Legal is part of Nexa. Goldstein Legal are members of the British Franchise Association and offer a range of legal services for franchisors and franchisees, regularly advising both businesses and individuals. Contact any of our friendly team for a confidential, no obligation chat to find out how we can help you.
Roz Goldstein

Roz Goldstein


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