Assistance in Franchising

Franchising is a way of expanding a business on less capital than would otherwise be possible. A ‘franchisor’ authorises proven methods of doing business to a ‘franchisee’ for an initial fee and an ongoing fee (typically based on a percentage of sales). Various services such as advertising, training and support are commonly made available by the franchisor, and may indeed be required by the franchisor, who will often require audited books, and may subject the franchisee or the
outlet to periodic and surprise spot-checks. Failure of such tests typically results in non-renewal or cancellation of franchise rights.

Franchise arrangements are governed by legal documents known as franchise agreements. These specify the territory/ies to be included, as well as the extent to which the franchisee will be supported by the franchisor (e.g. training and marketing campaigns). The franchisee is responsible for the day-to-day running of the franchise. The franchisor may impose quality control measures on the franchisee to ensure that the goodwill of the franchisor is not damaged.