FRANCHISE AGREEMENTS

What We Do

Greyson Legal are specialist franchise lawyers with extensive experience and knowledge of franchise law. We currently represent and have acted for numerous clients across a variety of industries:- setting up and developing franchise systems (as Franchisor); buying a franchise; selling a franchise; or with franchise disputes.

We assist our:

  • Franchisee clients with:

    • Franchise Agreement reviews and advice; and 

    • negotiating changes to Franchise Agreements

  • Franchisor clients to develop and prepare Franchise Agreements that meet their business needs, and which also comply with the Franchising Code of Conduct and other laws.

What is a Franchise Agreement ?

A Franchise Agreement is a key contractual document between a Franchisor and a Franchisee which governs their relationship and sets out each party's rights and obligations. Typically in writing it  is a legally binding document.

Franchisee legal advice reports

Franchise Agreements can be very complex documents and advice from experienced franchise lawyers, such as Greyson Legal, should be obtained.

We review the Franchise Agreement and related documents in detail and provide a through written Franchisee legal advice report:

  • highlighting key terms and conditions

  • commenting on the implications for you

  • noting any particularly onerous provisions

  • setting out key date

  • indicating how the Franchise Agreement compares with normal franchising practice

  • pointing out any areas where the franchise documents provided by the Franchisor do not comply with the Franchising Code of Conduct or law; and

  • making recommendations about matters that require further clarification and/or amendment.

agreement, report, audit, investigation

Don't take the risk of signing a Franchise Agreement without obtaining expert franchise legal advice.

Contact Greyson Legal for further details on how we can assist you.

Interaction between the Franchising Code of Conduct and Franchise Agreement

If an agreement meets the definition of a "Franchise Agreement" as set out in the Franchising Code of Conduct ("Code") - that agreement will be covered by the Code. This means that:

  • the Franchisor has various statutory obligations it must satisfy; and

  • the intended Franchisee:

    • receives minimum consumer law protections;

    • also has certain responsibilities in its dealings with the Franchisor.  

For instance, under the Code:

  • the Franchise Agreement is one of the documents that a Franchisor must provide to a prospective Franchisee at least 14 days before:

    • the Franchisee enters into that agreement; or

    • makes a non-refundable payment; and

  • a prospective Franchisee entering into a "new" Franchise Agreement is also given a 7-day cooling off period, entitling the prospective Franchisee the right to terminate the Franchise Agreement during the cooling off period if the Franchisee has second thoughts after signing.

Where a prospective Franchisee terminates during the cooling-off period, they are entitled to a refund of all payments they made to the Franchisor, less the Franchisor's reasonable expenses (where those expenses are set out in the Franchise Agreement).

The Code also applies to all Franchise Agreements (including renewals, transfers or variations).

Elements of a Franchise Agreement

The Franchise Agreement sets out the key information about the franchise being entered into. Franchise Agreements do vary between different industries, brands and Franchisors. There is no so-called "template" Franchise Agreement as there are a myriad of different factors that need to be dealt with. This is one reason why it is critical to obtain legal advice from lawyers experienced in franchising.

Keep in mind the Franchise Agreement is designed by the Franchisor. Therefore, it is likely to have been drafted to protect the Franchisor's interests and place more of the commercial risks, burdens and responsibilities on the Franchisee. The Franchise Agreement may appear fair and reasonable when you look through it, but invariably there will be risks and issues that trained professionals will identify that you may well have overlooked. If you enter into a Franchise Agreement without getting proper legal advice, you increase your risks if things do not work out.

As a guide, most Franchise Agreements will cover certain minimum provisions, such as:

  • Background/overview

  • Grant of franchise

  • Initial Term/duration of the Franchise Agreement

  • Renewal/option periods

  • Initial and continuing franchise fees

  • Territory selection

  • Site selection 

  • Initial and ongoing training and support

  • Use of intellectual property

  • Marketing/Advertising

  • Record-keeping

  • Insurance

  • Confidentiality

  • Resale rights/Assignment

  • Pricing of products/services

  • Supply of products/services

  • Security/Personal guarantees

  • Restraints of Trade 

  • Key performance requirements (or KPIs)

  • Franchisee's general obligations

  • Franchisor's general obligations

  • Default/Termination

  • End of the Term arrangements

  • Dispute resolution

  • Etc