Franchisee Legal Services

What is Franchising?

Offers a way to buy a ready-made business package

Franchising is a method for doing business, sometimes called "business format franchising".

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It's characteristics include:

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• a way of distributing goods and/or services and promoting the franchisor's brand through a network of franchisees

• the franchisor (or an associate) owns certain intellectual property rights

• the goods, the services and the franchisor have brand recognition in the marketplace

• the franchisee wants to associate itself with the franchisor's brand

• the franchisor grants a franchisee the right to operate an independent franchise business, subject to certain conditions being met, such as, the franchisee:

  • operates under the franchisor's brand and is licensed to use certain authorised trade marks, copyright and other IP rights

  • must comply with the franchisor's systems

  • acquires a range of goods and/or services for re-sale from franchisor approved suppliers

  • sells franchisor approved goods and/or services to consumers or others

  • pays the franchisor certain franchise fees and royalties in consideration for the above rights

  • operates within a prescribed franchise territory. 

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This terms and condition around such an arrangement are set out in a Franchise Agreement.

In Australia, franchisors and franchisees must also comply with the Franchising Code of Conduct, which exists under the Competition and Consumer Act 2010, as well as consumer and other laws.