Franchising

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Franchising

Purchasing a franchise can be an exciting and rewarding experience, but it is important that you know how the process works and what your rights and obligations are under the law. At Parke Lawyers our corporate lawyers know that you need expert legal advice when it comes to franchising and we provide you with the guidance and support you need throughout your purchase.

Franchise Agreements

A franchise agreement is a written agreement where one party grants the right to carry on the business to another party, under a specific system or marketing plan. It is usually for businesses that are associated with a particular trademark or symbol, as specified by the franchisor. The franchisee will need to pay a specific amount to the franchisor before the business can start.

Before entering into a franchise agreement, make sure that the franchisor gives you an information statement, which outlines some of the risks and rewards of franchising. The franchisor must also provide you with a disclosure document, as well as a franchise agreement and a copy of the franchising code at least 14 days before signing a contract.

Setting a Price

Franchisees will be responsible for setting their own prices. The franchisor may provide a recommended price, but it cannot impose a specific price on its franchisees. In some cases, should the franchisor force the franchisee to purchase goods or services from a specific supplier only, it may be prohibited.

Exclusive dealing is prohibited under the Competition and Consumer Act 2010. However, franchisors may require its franchisees to purchase services or goods from the franchisor.

Franchise Disputes

Our lawyers are highly experienced in handling franchise disputes, including managing litigation for both Franchisees and Franchisors. They work with you to achieve the best result in respect of the mediation process and court proceedings.

Good legal advice and managing the dispute early avoids escalation of a dispute between a Franchisee and a Franchisor. Our lawyers provide a personalised service, knowledgeable advice and expertise in handling legal disputes.

For more information about franchising, contact us to guide you through the process and your legal rights.

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