Franchising law is the body of law which aims to regulate the activities and conduct of individuals and businesses who are participants of a franchise toward each other. This law aims to protect both the franchisor and franchisee by ensuring that they are both sufficiently informed about the franchise before they push through with it.
What is Franchising Law?
Franchising law is the regulation which governs the franchising activities of businesses. It sets a code of conduct for both franchisors and franchisees, attempting to protect both parties. Under this law, the franchisor has the obligation to give the franchisee a copy of the franchising code, a disclosure document and a copy of the franchise agreement at least 14 days before the franchisee enters into an agreement with the franchisor or before the franchisee pays the franchisor any monies.
The franchisor also has the obligation to inform the franchisee of any relevant facts through writing at least 14 days before the franchisee is set to sign the agreement. In addition, the franchisor is prohibited to prevent the franchisee or potential franchisee from associating with other franchisors or potential franchisors. Moreover, the franchisor is required to make a disclosure agreement for the franchisor in accordance with the Franchising Code within four months after the end of a financial year.
Franchising law also prohibits franchisors from producing agreements which require a franchisee to sign a waiver.
Who Needs Franchising Lawyers?
Franchising law firms and lawyers are professionals who have been trained in the legal aspects of franchising. Their expertise can be beneficial to businesses or individuals who are looking to buy a franchise and to businesses who want to grant a franchise of their business.
Franchising law firms and lawyers can offer legal advice and legal assistance to franchisors and franchisees. Some of their expertise revolves around areas such as:
- Drafting and reviewing franchise agreements or any other documents related to franchising
- Providing legal advice concerning the Trade Practices Compliance
- Providing advice on strategic planning
- Providing legal advice and assistance in terms of purchase, sales, or restructuring of the company's franchise systems
- Providing advice with regards to the Franchising Code
- Representing individuals or companies in court litigations in cases of franchise disputes
Franchising lawyers can help businesses who enter into franchise agreements avoid court litigations resulting from non-compliance of the Trade Practices and the Franchising code.
If you want to enter into a franchise agreement and need advice on legal matters, hire the services of a franchise lawyer.