Embarking on the road to entrepreneurship through franchising is an exciting prospect. While you may feel that all the building blocks for your future business venture are already set up as you stand to gain from a business-in-a-box solution, it’s important that you do preliminary research and due diligence to have a better grasp of what you’re getting involved in.
The more clarity you have, the better. But often, it takes a specialist to break down the complexities in franchising for you. This is where franchise lawyers take centre stage. If you haven’t explored the services of these professionals in franchising yet, now is a good time to begin.
In this article, we take a closer look at the laws governing franchising in the UK, what franchising lawyers are and what they do, as well as how much you can expect to pay for their services and where to find one. Let’s dive in.
What are the franchise laws in the UK?
Laws govern the way in which we conduct ourselves and our affairs in daily life. And while there are laws for practically everything you can think of, franchising is not one of them. That’s because there is no specific law on franchises in the UK (England and Wales).
Instead, franchise regulation is governed the same as other businesses. For this reason, franchise legal matters often fall under a broad category of related business laws such as the law of contract, case law, consumer protection laws and others.
Despite the absence of legislation on franchising specifically, an industry body — the British Franchise Association (BFA) — helps the industry self-regulate by setting ethical standards, guidelines and regulations, which franchisors and franchisees are not bound by but choose to follow instead.
What is a franchise lawyer?
And now we come to the question of what is a franchise solicitor. A franchise solicitor or franchise attorney is a legal professional that helps franchisors and franchisees navigate the legal terrain that surrounds the franchising industry as a whole and the franchise business in question in particular. Such a franchise lawyer can assist both parties with aspects such as:
- Compliance and oversight
- Starting or terminating a franchise business
- Dealing with contracts between the parties, such as the franchise agreement
- Helping parties navigate complex financial and tax issues, such as revenue and expense distributions
- Assisting with reporting requirements
- Attending to dispute resolution and court proceedings
- Addressing property and personnel questions
- And other essential tasks.
What does a franchise lawyer do?
While we’ve given a brief overview of the aspects that franchise lawyers in the UK deal with, their work can be more complex than what is set out above. Below, we explore a few of the most common areas that franchise agreement lawyers are called upon to assist with.
- The franchise agreement: This is possibly the number one most crucial document that governs that franchisor-franchisee relationship. It is essential for both parties to consult with franchise solicitors to draft and thoroughly review this agreement. It needs to be both legally compliant and protect both parties’ interests. On the franchisee side, the solicitor will, in some cases, negotiate better terms of the franchise agreement to ensure reasonableness and fairness. They can also advise prospective franchisees regarding their obligations and possible restrictions. These professionals will also ensure compliance of the franchise agreement with any franchise-related or business laws and regulations. Finally, they can offer franchisees guidance on the conditions and procedures involved in terminating the franchise agreement. Worth bearing in mind is that most franchisors, such as the Belvoir Franchise Group, do not vary the terms of their franchise agreements. However, having a clear understanding of these terms with the help of a franchise lawyer can help franchisees better navigate the world of franchising.
- The business entity: Franchise lawyers in the UK can also help prospective franchisees determine the ideal business “vehicle” or entity for the franchise. Examples of the different business entity types include sole proprietorship, corporations, limited liability corporations, partnerships, etc.
- Negotiating commercial leases and navigating property law: For franchise opportunities that require a physical location, your franchise lawyer can help you negotiate favourable commercial leases that do not only protect the landlord. In addition, they can help you negotiate more favourable lease terms.
- Employment law: Since most franchisees will need to hire staff, they also need to be aware of the complexities surrounding labour or employment law on employing and maintaining staff.
- Commercial law: Particularly useful for franchises that deal with suppliers, a franchise lawyer can offer advice on business terms and conditions or commercial contracts with these parties.
- Data protection and intellectual property: Most franchises collect customer data. With a competent franchise lawyer at your side, you can get advice on how best to use personal data you have obtained from your customers. On the intellectual property side, such a lawyer can help franchisees better understand their obligations so that they do not infringe on any terms related to the use of intellectual property owned by the franchisor.
- Corporate law: If your franchise business has shareholders, you may need the expert help of a franchise attorney to offer advice and recommendations on shareholder agreements or on the operational aspects of the franchise company.
- Legal representation: In the event of any disputes arising, franchise lawyers can represent both franchisors and franchisees at court hearings. They can also engage in matters of alternative dispute resolution, such as mediation or arbitration.
- Advisory roles: One of the things that franchise solicitors are responsible for is staying up to date on new rules and policies that might affect the business. This can also mean offering advice to clients regarding any potential risks that may be attached to the franchise business.
Who needs a franchising lawyer?
As for the question: who needs a franchising lawyer, the answer may surprise you. While it is obvious that these professionals are sought out by prospective and current franchisees as well as established franchisors, they are also highly beneficial to franchisees who plan to expand their business and to individuals engaged in franchise-related businesses.
How much does a franchise lawyer charge for their services?
Having established the importance of a franchise lawyer in your franchising journey, the natural question to ask is how much will this service cost you. There are several factors that will affect the fee. These include:
- The complexity of the matter
- The solicitor’s level of experience
- The location
However, they may also work based on a fixed fee or hourly basis (especially for litigation), while others may work on a no-win-no-fee agreement or a damages-based agreement. It must be noted that the hourly model of charging (except for litigation) is quickly becoming outdated.
Many franchise solicitors today should charge a fixed fee for certain services, such as reviewing your franchise agreement, reporting on it and consulting with you about its provisions. The average cost for such a service should be in the region of £400-£750 plus VAT.
How to find a franchise lawyer
While you may think that doing a Google search for franchise lawyers is your only bet, there are several other avenues to consider. Start by consulting with the BFA, which has a directory of accredited franchise lawyers.
Another option you can consider is to seek recommendations from current franchisors and franchisees.
There are also legal industry chambers, bar associations and legal bodies that you can reach out to to offer you their recommendations.
Conclusion
When it comes to the finer details related to your franchising agreement, having an experienced franchise lawyer comb through the minutiae is essential for your peace of mind and continued future success under the franchise umbrella.
And if you are still considering your options in franchising, an excellent starting point for you would be to explore the opportunities offered by the Belvoir Franchise Group. With strong backing behind you, make a success with a lucrative franchise in the property industry and achieve your personal and professional goals. Get in touch with us to find out more today!
