Preparation is everything. Thorough due diligence, professional advice and realistic business planning are essential before signing up. Territory rights, online sales treatment, renewal conditions and exit obligations should all be clearly understood. Franchisees may be required to obtain legal advice before signing a franchise agreement but even if they are not, this is still a sensible step – you are considering investing a substantial amount of time and money and part of this investment should be in due diligence.
Speak to other franchisees about their experiences and get a range of views from long standing to newer franchisees.
It may also be sensible to seek financial advice.
Good records are a powerful tool
Franchisees should document training, support, key operational decisions, track performance against KPIs and keep evidence of external factors affecting results.
Early engagement pays off
Raising concerns promptly, proposing workable solutions, and using agreed escalation routes can resolve many issues before they harden into formal disputes.
Exit planning should not be an afterthought
Understanding de‑branding obligations, confidentiality requirements, sale restrictions and post‑termination restrictions early on can avoid costly disputes later on.
Resolving disputes
For the majority of franchise disputes, discussion and negotiation is required and sensible before litigation and for good reason. Early, commercial resolution often preserves value on both sides.
Where court proceedings are unavoidable, procedural compliance and well organised evidence are essential. In our experience, the best outcomes are achieved where disputes are approached strategically, proportionately and with a clear focus on protecting the underlying business.
Our Dispute Resolution team advises franchisees on preventing, managing and resolving franchising disputes — from early risk management and compliance issues through to mediation and litigation.
If you would like to discuss any of the issues raised in this article, please contact our Franchising team here.