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Q.

Can I buy a franchise with a business partner?

Author: Vicky Wilkes

answered by Vicky Wilkes

Senior Associate at Squire Patton Boggs (UK) LLP

There’s no reason why you can’t, however there are a number of issues that should be addressed at the outset.

The most important of these is whether you can get the approval of the franchisor. A franchisor may want to interview all the potential franchisees and carry out background checks to ascertain financial history and business experience before agreeing to grant the franchise.

You and your franchise partner will also need to think carefully about how decisions are made. This is a similar issue in any partnership, but with a franchise agreement, having the consent and understanding of the franchisor is also crucial, because the franchisor will want assurances the business will not be held back by a falling out between the partners.

It may be the case that some of the franchisees intend to be silent partners, who contribute financially and leave the day to day management to another partner. Recording all this in a partnership agreement is crucial to the success of your franchise, as well as deciding who is entitled to what assets when the franchise is sold.

Vicky Wilkes is a senior associate at law firm Squire Patton Boggs (UK) LLP, specialising in both domestic and international franchising.

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