Font Size

Are You Thinking About Franchising


Lawdit Solicitors - Expert Author

Legal Articles
Submit Articles   Back to Articles

Released 8 July 2008

Some key considerations

Franchising is a very good method of growth for some businesses. Some of the key benefits for the franchisor’s include:

increased service channels for the franchisor providing quick market penetration

chance to maximise existing networks

a reduction in the risk of failure

control of all businesses through a franchise agreement

the granting of a licence to a given franchisee for a fee over a fixed term

an identical business format following your perfected practices/ procedures

the opportunity to make money from providing support and marketing services to franchisees

To set up a franchise, the franchisor has to put in some hard work in documenting his practices/ procedures.

First and foremost the franchisor must have a pilot operation up and running. He must have manuals, programs for marketing, training, monitoring and control procedures and dealing with the finances of the business. Above all the business model produced must be attractive to others in order for it to be successful.

In return for offering a franchise the franchisor will usually seek a royalty payment, i.e. a fee based as a percentage of the franchisee’s turnover or margin on product/ service in addition to an initial franchisee fee (outlay fee) for the costs incurred in setting up the franchisee in business.

The franchisee will benefit form the power of the brand of the franchisor, the wealth of experience that the franchisor has in the product/ service and the support that the franchisor can provide in what one would assume is a proven product/ service, the marketing of the product/ service on a wider scale, product/ service development etc.

Izaz Ali is a commerical lawyer who specialises in information technology law and intellectual property law with an emphasis on IT, escrow and buying and selling online businesses.

About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.

Follow us @Scopulus_News

Article Published/Sorted/Amended on Scopulus 2008-07-13 15:04:18 in Legal Articles

All Articles

Copyright © 2004-2021 Scopulus Limited. All rights reserved.