Law is a great way to conduct business. If you are thinking of branching out into franchising then you will need help and advice from legal specialists in the legislation and regulations in this area of the law.

This includes the code of ethics, EU law and national law. Your franchise solicitors will be able to tell you about this in more detail, but please read on for a brief guide to franchising your business.

Is your business suitable?

The first thing you need to do is to determine whether your business is actually suitable; this is something your franchise legal advice will be able to help you work out. This is a very important step as not all businesses are suitable for the process. For instance, your company will need to have been operating successfully for a suitable period of time and will need to have the ability to offer good returns both for you and any future franchisees. Your business will also need to be open enough that it can take franchisees operating semi-independently and it should be ripe to expand into new geographical areas.

The basics – branding and systems

Once you have determined that your business is suitable, your franchise solicitors will be able to guide you through the next steps. These relate to issues such as branding and systems. For instance, you will need to be certain that your brand is distinctive and something that other people want to invest in. You also need to make sure your brand (such as trade name, trademark and other IP associated with the business) is protected.

In terms of systems, you will need to be able to prove that your method of business works and that it could be replicated somewhere else. This means that an idea for a franchise is not enough; you need to be able to prove that it will work in practice.

Recruitment and agreement

When it comes to recruiting franchisees, there are a variety of ways you could do this. You might already know people who would be interested, for instance, or your franchise legal advice team will be able to give you guidance on the best way to advertise. Once you have franchisees on board (this might take some time), you need to consider the issue of the agreement. This will normally be drawn up by the franchise solicitors and it needs to be fair to both parties.

Financial arrangements

One final, major issue to consider is your financial arrangement. As well as having a strategy to make money and grow the business, you also need to be up front about the fees your franchisees will have to pay (including initial fees and future royalties) to make sure there are no misunderstandings. This means you need to have a good understanding of your business, the market you’re operating in and the position of your new franchisees.

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