It should come as no surprise to learn that the franchisor/franchisee relationship is a two way affair; the franchisor having tested the market, proved that the business model is viable, and committed to operating in accordance with the British Franchise Association’s code of ethics, and the franchisee having invested a considerable amount of time and money in their franchise business and contributing to the growth and ongoing success of the network and the brand.

The tie that exists between a franchisor and a franchisee is confirmed in a written contract known as the ‘franchise agreement’.  These tend to run for a fixed term, usually five years with an option to renew for another five years, although this can be longer.

As well as affording protection, the purpose of a franchise agreement is to ensure that the nature of the relationship between franchisor and franchisee is absolutely clear to both parties. 

On studying a franchise agreement in detail it will appear to be weighted in favour of the franchisor, reflecting the level of risk and the scale of their investment and commitment to developing the business and the concept. As a franchisee, what you are actually buying into is a brand and a technique for operating a business and it is vital that these are protected, for both the interests of the franchisor and the other franchisees in the network.

However, the franchisor’s responsibilities to the franchisee should also be set out clearly in the agreement, as the relationship should be fair.

For example, franchisees need to know what procedures are in place for dealing with disputes; and what provisions are available when they reach a stage where they want to sell up and retire from their business.

Even though franchise agreements are non-negotiable, which ensures that the contract you sign is the same as the one that everyone else has signed, prospective franchisees are advised to have their contract independently assessed by a lawyer who is experienced in franchising.

Among the bfa-affiliated professional members are a number of lawyers with a broad knowledge of the UK franchise sector, who can help you to get to grips with the legal side of things. 

You may ask yourself ‘why bother?’ if the terms of the agreement are not going to change, however, it is crucial for prospective franchisees to be clear about what they are committing to. And once your contract has been properly assessed and explained to you, and all your questions have been answered, you still have the option of signing up for it or not.