The franchise lawyer

If you are looking to set up or buy a franchise business,  be sure to enlist the help of a legal professional who adds real value to the process. 

Lawyers are not cheap, but as you cannot set up or buy a franchise without one, it's vital you find a lawyer who understands what you want to achieve, and who  understands the industry.

The Franchise Association website www.franchise.org.nz and the Franchise New Zealand website www.franchise.co.nz list  advisors who specialise in franchising.

The franchise relationship is unique, in many ways it's like a partnership. So too your relationship with your lawyer is a partnership.

When acting for a franchisor, the lawyer's role is to discuss the merits of different approaches to business growth, organic growth, partnership, joint venture, licensing or distribution arrangements, or full service franchise.  They also advise on structuring, intellectual property, leasing and tax issues, and refer you to other appropriate  experts.

The lawyer will, in consultation with you and any other advisor, prepare necessary documents.
These may include preliminary and confidentiality agreements, the franchise agreement, disclosure statement, lease/employee/bank riders, security agreements, and restraints of trade. 

Depending on complexity, some franchise systems may employ all of these, and others only a few.  The franchise lawyer will have an ongoing role with any system, negotiating with other lawyers, advising on assignments, re-documentation, renewals and disputes/enforcement.

It is vital your advisor has a clear understanding of how best to help you with your due diligence.  He or she needs to investigate and identify any concerns and deal with them in the way that best enhances your chance of a successful outcome.

You need to move forward with your eyes open. 

While the terms of franchise agreements are generally not negotiable, there may be some scope to secure variations specific to your circumstances.

An experienced franchise lawyer will understand how best to approach that process without upsetting the relationship you are establishing with your future franchisor.

Your lawyer will also advise you how best to set up your business structure, and give advice about leasing, funding, and employment issues.

Should the need arise, you may also require assistance in dispute resolution processes.

As setting up or buying a franchise will be a very significant undertaking for you, it is vital to carefully select a legal professional who has the experience and the approach to best help you achieve your objectives.

*Chris Bradley is a partner at Miller Bradley Lawlor, Greenlane, lawyers specialising in franchising, licensing and employment law.