We have set out below the stages that are usually involved in buying a franchise business.
Explore the franchise opportunities available
While there are many franchising opportunities, not all of them will be the right fit for you. You should consider your strengths and your interests, when considering buying a franchise.
Receive an information pack from one or more franchisors
You should carefully read through the information pack provided to you.
If you have any meetings with the franchisor or its representatives you should make clear notes of those meetings and what is represented to you about the franchise system.
Apply to the franchisor
During this stage you can expect to sign a confidentiality agreement and pay a fully refundable deposit.
Receive your Documentation
You should receive from the franchisor:
- An Information Statement (if you have not already received one);
- A current disclosure document for the franchisor;
- A franchise agreement in the form of the agreement which is to be executed;
- A copy of the Franchising Code of Conduct.
Conduct Due Diligence and Get Advice
Before you enter into any agreement you should thoroughly investigate the offer and the franchise system and obtain advice from an accountant, a lawyer and a business adviser.
The disclosure document will set out the contact details of franchisees in the franchise system. You should contact both current and past franchisees and ask them about their experiences.
You should also prepare business plans and budgets.
Negotiate any amendments
As a result of the advice that you obtain or the information that you gather when investigating the franchise system, you may want to negotiate either the offer being made by the franchisor or the documents that the franchisor proposes that you sign.
Sign the Franchise Agreement and any associated documents
Once you have signed the franchise agreement you have seven days during which you can cool off and terminate the Franchise Agreement (there are generally costs involved in terminating the Franchise Agreement at this stage).
Commence operation of the Franchise Agreement
Contact us so that we can provide you with detailed, relevant advice in relation to the transaction and the franchise agreement.