What Happens If I Go Into A Franchise And It Bombs? Will I Have To Go To Court?


Having read about the problems faced by Billy Baxter’s franchisees, how can I be certain that I won’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. Don’t just take the franchisor’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 – revenue and expenses, as well as security of profitability and growth opportunities. Read full article.

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