Business-format franchising, according to the British Franchise Association (BFA), is the granting of a licence by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trade mark/trade name of the franchisor and make use of an entire business package, comprising all the elements necessary to establish a previously [...]
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Archive | Buying a franchise
How franchising works: the two sides of the story
Posted on 20 July 2011.
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Standards set by the British Franchise Association
Posted on 20 July 2011.
It is a truism that the majority of franchisors that are able to join the BFA do so. The many benefits range from ongoing exposure to best practice and developments in the industry to being counted amongst the band of ethical franchise practitioners.
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Franchise contract – the rights and obligations
Posted on 20 July 2011.
The franchise contract is the document in which the whole transaction is drawn together. It must accurately reflect the promises made and it must be fair, while at the same time ensuring that there are sufficient controls to protect the integrity of the system.
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Sample franchise contract
Posted on 20 July 2011.
This sample agreement is for illustrative purposes only and must not be used by any party seeking to franchise their business without taking the author’s prior advice.
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Projections: fact or fiction
Posted on 20 July 2011.
Everyone going into business will sooner or later need to get to grips with the figures. With franchising you should be looking at a tried and tested business format, so you should be provided with projections showing how the business could perform.
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Role of disclosure in reducing risk for both parties
Posted on 20 July 2011.
Risk management by franchisors is an essential part of their international strategy and roll-out process. Those who fail to identify, reduce, and then manage the remaining risk do so at their peril. They should anticipate spending large amounts of time and money seeking to extricate themselves from the quagmire of litigation.
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Make sure your business plan packs a winning punch
Posted on 20 July 2011.
Despite the recession, it is clear that financial assistance for franchises is readily available from banks specialising in the sector. Apart from a strong business proposal what is it that the bank manager will be looking at when applicants present them with their business plan?
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Remedies if the franchise affair must end
Posted on 20 July 2011.
A franchise relationship should be capable of withstanding the test of time. Indeed, the lack of failure among franchisees, as highlighted annually by the NatWest/BFA survey, is one of the strongest selling points of franchisors.
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Contributors
How franchising works: the two sides of the story
- The scene is set by Cathryn Hayes with a review of franchising from the viewpoint of both parties - the franchisor (the firm operating the franchise network) and the franchisee (the company or person buying a franchised outlet). She is head of franchising at HSBC Bank.
The standards set by the BFA - The reputation franchising enjoys is due to the standards set by the BFA, the industry’s self-regulatory body. Andrew Quail, the association’s head of quality standards and compliance, explains how the BFA ensures that its standards are met.
Franchise contract: the rights and obligations - The terms of the franchise agreement are reviewed by Martin Mendelsohn, franchise lawyer, author and academic.
Sample franchise contract - This sample contract by Mark Abell, joint head of the franchise and licensing team at the City law firm, Field Fisher Waterhouse, is for illustrative purposes only and must not be used by any party seeking to franchise their business without taking the author's prior advice.
Projections, fact or fiction - A guide to understanding the financial projections put forward by the franchisor. Lorna Smith is the senior franchise manager at HSBC Bank.- Role of disclosure in reducing risk - With more countries introducing pre-contractual disclosure to protect franchisees, the need is increasing for UK franchisors expanding abroad to adopt such procedures. explains Mark Abell.
Make sure your business plan packs a winning punch - A sound business plan is essential if an application to the bank for a loan is to be successful. Richard Holden, head of franchising at Lloyds TSB, explains what the plan must cover.
Remedies if the affair must end - The relationship between the franchisor and franchisee should withstand the test of time, but disputes can arise and may become so serious that the parties have to separate. Nicola Broadhurst, of Surrey law firm, Stevens & Bolton, explains the damage limitation options.