Franchise Lawyers
Meeting the legal needs of franchisors and franchisees
Traditionally, franchising has been associated chiefly with the catering and automotive industries, with the majority of major restaurant chains and car sales operations operating this way.
However, the mix of franchise businesses is significantly broader than many of us may realise and spans a diverse range of sectors and industries, including retail, care services, education, professional services, leisure, property and many others.
For established businesses, franchising can be a viable way to expand, while for the franchisee, it can offer the opportunity to run a business with fewer risks: the brand is already established, the business model works and has gained market share.
Our team provides specialist legal advice to both franchisees and franchisors. Our work for clients draws upon our own considerable experience in this field and also benefits from our specialism in other relevant disciplines: our dedicated corporate, tax, commercial, employment and property teams are called upon as required, to provide a truly holistic service. We also have particular expertise in franchise resale transactions, acting for both buyer and seller.
These credentials explain why we are retained by some of the major names in UK franchising. It also explains why we are among the select handful of English law firms currently accredited by the British Franchise Association.
Franchising your business
If you’ve decided that your successful business is “franchisable” (and you’ve considered The British Franchise Association’s guidance on this) and you’ve developed a business plan, the next step is to set up the franchise system and consider your distinctive business format, methods and branding.
You’ll also need to prepare a franchise manual. Alongside this, you’ll need to start work on the franchise agreement covering fees, territories, training and support, as well as the length of the contract term and any exit restrictions.
As a franchisor, you will want to ensure that the franchise agreement includes a requirement for the franchisee to pay the appropriate fees on time, an obligation on the franchisee to comply with the franchise manual and the rules relating to licences of intellectual property rights and covers the franchisee being prohibited from using the franchisor's confidential knowhow to operate a similar business, either during or (more commonly) after the term of the franchise agreement.
We can help you get the franchise agreement right and, once you are happy with the contract, you can then roll it out with future franchisees so that you have a consistent basis of operating with franchisees which requires minimal administrative work.
Expanding your franchise network
Franchising can be a great way to grow a business quickly and efficiently. By partnering with franchisees, you can expand your brand to new markets and reach new customers. A crucial first step in expanding your franchise network is to develop an expansion plan including clear objectives, target markets and a realistic timeline for growth.
You will need to identify and research potential markets and to understand where your business model is likely to thrive and to consider any operational and logistical factors relevant to these new potential markets.
You will need to attract quality franchisees and provide first class training and support. Recruiting the right franchisees who have financial resources and whose values align with your brand is essential for the success of your expansion. Maintaining the quality and consistency of your brand across all franchise units is also key.
How we can help
We work with our clients throughout the lifecycle of their franchise business. This includes making a new investment, growing a network, and realising the value built over many years. Our legal experts advise clients on franchise agreements, leases, legal due diligence, sale and purchase agreements, buy-backs by the franchisor, and closures, amongst others.
In a sector rife with terminology and jargon, our aim is to help our clients in an honest, transparent and straightforward manner. That involves using plain language, wherever possible.
To that end, we offer a very quick guide to some common phrases:
- Investing in a franchise: This means entering to a franchise agreement with a franchisor which gives you access to run a franchised business.
- Grant of new franchise term or renewals: Most franchise agreements are granted for a limited period of time, and therefore may be subject to renewal or extension at the end of the term. Without a renewal the franchisee loses the right to run the business.
- Franchise agreement: Means the legal, written contract between the franchisor and franchisee which sets out the rights and obligations of each party.
- Franchise leases: Depending on the type of franchised business, franchisees may need to secure business premises from which to operate.
- Sale and purchase agreements: are the legal agreements under which franchise businesses are bought or sold. This might be between the current owner of a franchise and another franchisee or someone who is investing in a franchise and becoming a franchisee by acquiring the existing franchised business.
- Resale process: A franchise resale is when you buy an existing franchise business from an existing franchisee, which could be undertaken as a share purchase or asset purchase transaction.
- Buy-back of franchise business by franchisor: this occurs where a franchisee wishes to exit the business and agrees to sell the franchise back to the business owner. The franchisor may then operate the business itself, or franchise the business to another franchisee.
- Franchise closures: a franchisor may wish for a particular site or territory to cease operating, perhaps at the expiry of the existing franchise term. The franchisor and franchisee would then enter into a closure agreement which sets out the terms under which the franchise business is closed.
- Sale and purchase of whole franchise networks: This refers to cases where the franchisor sells the entire franchised business, as opposed to one or more individual franchises, to a buyer.
- TUPE: this is an acronym commonly used to refer to the Transfer of Undertakings (Protection of Employment) regulations 2006. TUPE will usually automatically apply in a business asset sale such as a sale or purchase of a franchise.
Latest successes
Franchise agreements and documentation
We have an outstanding track record of successful work within franchising. Our team has unbeaten experience in drawing up and overseeing the agreements and documentation needed for a successful sale or purchase.
We assist franchise buyers in considering all aspects of the deal: not only the financial cost, but matters such as the brand reputation, the precise legal obligations they are taking on, any restrictions that may be placed on their operation, together with the level of ongoing support they can expect.
For franchisors, we help them in considering the options available, the selection of potential franchisees, assessing their respective qualities and track records, together with ensuring the cost and other agreement details meet their current and foreseeable requirements.
Franchise resales
The resale of an existing franchise brings its own particular set of issues. We are here to help you throughout this process, using our expertise and experience to protect your best interests, whether you are the buyer or seller.
Each franchised business network typically has its own processes and documentation for franchise resale transaction. This immediately makes the sale distinct from non-franchised business transactions. Through our years of experience, we are well-versed in the particular features of business sales and purchases in the franchising space, such as the use of retentions, the need to complete training courses and how the franchisor might be involved in a sale process between two franchisees. Being familiar with these distinct features enables us to guide clients in an efficient manner, and we always pride ourselves on a pragmatic and down-to-earth approach.
Employment law
Whether you are a franchisee or a franchisor, our employment legal specialists are here to help with the employment and HR aspects of your business. We offer a HR and employment law advice service on retainer called Hexagon. Hexagon is a great way to receive expert employment law and HR advice whenever you need it, but at a fixed affordable price each month to give you comfort regarding legal costs. We can also prepare contracts of employment, and draft various employment policies for your business as required.
Our employment experts can also review, advise, and negotiate the employment related terms in your franchise agreement. Franchise agreements commonly set out detailed obligations which the franchisee must adhere to in respect of the employees.
We can also provide specialist employment advice during the sale or purchase of a franchise. When acquiring or disposing of a franchise via an asset purchase transaction, the franchisee and franchisor must understand the impact of the Transfer of Undertakings (Protection of Employment) regulations 2006, commonly referred to as TUPE. From the date of handover, the new franchisee assumes the rights and responsibilities of the franchisor or outgoing franchisee. They must continue to employ all of the employees on the same terms and conditions. They also inherit any liabilities associated with those employees. Obtaining specialist advice is essential, as failing to comply with TUPE can result in expensive legal claims against a franchisee or franchisor. We can assist you with TUPE process and provide you with comprehensive advice on all relevant matters.
Property leases
Our experienced property team can assist in dealing with the property aspects relating to the franchise from which the franchise is being operated. This could be in terms of lease negotiation when granting or taking on a lease of a property as landlord or a tenant. Regardless of whether you are landlord or tenant of the franchise property it is important you understand the terms of the lease and the legal implications on the parties.
It is essential you obtain legal advice as in not doing so it can result in an extremely expensive exercise either during the lease term or even post completion of the lease. We can advise you throughout the process so you fully understand the lease terms before entering into the franchise lease.
Why choose us as your franchise solicitors
Our specialist knowledge and experience in franchising is complemented by the all-round wealth of legal capability covering all aspects of commercial and corporate activity.
We can also assist franchisees with all HR and employment law advice generally. We offer a HR and employment law advice service on retainer called Hexagon. Hexagon is a great way to receive expert employment law and HR advice whenever you need it, but at a fixed affordable price each month to give you comfort regarding legal costs.
We can also prepare contracts of employment, and draft various employment policies for your business as required. Summary of the value and expertise we have in handling all aspects of franchising.
Combined with our total commitment to client service and our pragmatic, straight-talking approach, we represent an eminently capable and trusted friend to generations of businesses, both locally and further afield.
Meet the franchising team
Maria Nicol
Legal Director - Commercial Property
Katie Willems
Legal Director - Corporate