Having read about the problems faced by Billy Baxterâ€™s franchisees, how can I be certain that I wonâ€™t suffer losses if I buy a franchise? And is the only recourse to drag the franchisor to court, as in this case?
Answer co-written by Leanne Scott of Carter Lawyers
It is always important when entering into a business venture, whether it is a franchise or otherwise, to obtain your own legal and accounting advice. Donâ€™t just take the franchisorâ€™s word for it, do your homework. If you are not clear, ask for clarification from the franchisor.
Consider in advance the requirements for the business, for example permits, licences, registrations; employees needed to support the business; customer and supplier relationships; lease duration, franchise terms and other relevant agreements.
In particular, look carefully at the profitability of the business â€“ revenue and expenses, as well as security of profitability and growth opportunities. Read full article.