Commercial Law For Small And Medium Sized Business Owners
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Commercial Law For Small And Medium Sized Business Owners

Hello, my name is Robin and I own a medium sized business which is based in a suburb of Perth, Australia. Many business owners do not understand the importance of commercial law on their operations. I know that I certainly didn't when I set out. At first, this wasn't an issue but as my business grew, I realised that if I didn't teach myself about the legal rules in place and seek expert help, I would find myself in serious trouble. I got in touch with a great law firm who helped me to understand exactly what I needed to know. I decided to start this blog to help other business owners.

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Commercial Law For Small And Medium Sized Business Owners

Are your interests protected when you are buying a franchise?

Daniel Young

For you to buy the right franchise you need to look at all the considerations and financial obligations. There is also the issue of the agreement that must be made between you and the franchisor.

It is very important to have a franchise lawyer who has experience in handling franchises to advise you on the franchise agreement and protect your interests. The lawyer will also ensure that the terms of the franchising code of conduct are adhered to.

Franchising code of conduct

This regulates the relationship and conduct of the franchisor and the franchisee. There are several requirements of the franchising code of conduct that should be adhered to during the negotiations between you and the franchisee, they include:

Good faith

The franchising code of conduct requires that both parties conduct their affairs in good faith towards each other when entering into the franchise agreement. This good faith should also be exercised during operations and in any negotiations as well as disputes that may arise between you and the franchisor.

Disclosure

It pertains to providing sufficient information to each other so as to allow each other to determine whether the franchise agreement should be made. The franchisor must disclose to you all relevant information, this will have a bearing on whether you will decide to buy the franchise or not.

Terms of the franchise agreement

The franchising code of conduct provides what should be included in the franchise agreement and what should not be included. The clauses here touch on the rules of engagement between you and the franchisor.

Some of the things that are handled by the agreement include advertising requirements and funding. On the other hand, the franchise agreement cannot include clauses that give you liabilities and obligations that are not legally permitted by the franchising code of conduct. The franchise agreement also provides a dispute resolution mechanism that can be employed between the franchisor and the franchisee.

Why you need a franchise lawyer

The issues covered by the franchising code of conduct are supposed to protect your interests as well as the franchisors. However, you will need a franchise lawyer because of the following reasons;

  • Some terms of the franchise agreement can be negotiated and your lawyer is able to get an agreement that is in your best interests.
  • If there is need your franchise lawyer will also ask that some terms be included in the franchise agreement.
  • Despite the mechanisms in place for conflict resolution that are in the contract, sometimes disputes can arise between you and the franchisee and you will need a lawyer to get the best outcome for you.

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