Talking to other franchisees before signing on the dotted line and starting your own business is a must. But if the only people you talk to have been handpicked and fed a line by the franchisor, then you might as well not bother.
Franchising booms in a recession thanks to people investing their redundancy pay, but many pitfalls await the unsuspecting investor in every new start-up.
Duncan Vaughan, head of franchising team at Manchester-based law firm Pannone LLP, said some less reputable franchisors have been known to do their business in such a way that franchisees are forced to act unlawfully, such as by fixing prices.
When it comes to deciding which franchise operation to join, Vaughan said finding a British Franchise Association (BFA) affiliated franchisor was a must as there is no specific regulation for franchising within the UK. He said that doing business with companies which are not members of the BFA could leave a franchisee at the mercy of companies which insert onerous clauses in their agreements.
Competition law… read on.
