Why do I need a specialist franchise lawyer?

Investing in a franchise opportunity can be exciting, but it also comes with complex legal obligations. Consulting a specialist franchise lawyer can protect your investment, clarify your rights and obligations, and help you make informed decisions.

Here, leading franchise law experts explain everything you need to know…

What is a franchise lawyer and why do I need one?

A specialist franchise lawyer is a legal professional who understands the unique nature of franchise agreements and the commercial rationale behind them. They can help you navigate obligations, rights, and potential risks before you commit.

Vicky Wilkes, head of legal at Aston Villa Football Club, explains: “Expert, professional advice is especially valuable if you are not familiar with legal documents or with the concept of franchising.

“A lawyer specialising in franchising should be able to help you understand the small print of the franchise agreement. They’ll also highlight those provisions that are common practice in the franchise industry and those that are particularly onerous.”

Shelley Nadler, legal director at Bird & Bird, adds: “Specialist franchise lawyers understand that a franchisor needs to have a number of controls in the agreement to protect its brand and other intellectual property rights, to ensure the uniformity of the system and the quality of its products or service.”

When should I hire a franchise lawyer?

Timing is crucial. John Pratt, senior partner at Hamilton Pratt, advises doing it “before you enter into the franchise agreement.”

However, as Pratt notes, “Only approach a lawyer when you have a clear idea concerning your intention to proceed, otherwise the costs you will incur will be wasted.”

Vicky Wilkes also highlights that legal review should happen as soon as you receive a franchise agreement. “Practical and commercial legal advice on the franchise agreement should form an integral part of any franchisee’s due diligence process.

“Most franchise agreements are standard across a franchisor’s network. They will usually be provided on a ‘take it or leave it’ basis. However, this does not mean it should be signed without any legal advice.”

How do I find a specialist franchise lawyer?

Not all lawyers are equipped to handle franchise matters. Pratt advises: “The solicitor who advises you on your general commercial issues, or even worse, a solicitor who has done your conveyancing or your divorce, would not, under any circumstances, be the right person to use. Never use a solicitor who is not a true expert in franchising.

“Inevitably, solicitors who claim to be experts in franchising when they are not learn about franchising at your expense or adopt an approach that simply doesn’t reflect good practice in franchising.”

Pratt recommends starting with the British Franchise Association’s list of affiliated lawyers. “It contains all the lawyers who have franchising experience, but bear in mind that some have more experience than others.”

Nadler adds that a BFA-accredited lawyer demonstrates proven expertise: “The BFA will only accredit a franchise lawyer if they can show that they are experienced in the area of franchise law.”

What advice will my solicitor provide?

A specialist franchise lawyer provides advice on the franchise agreement and related legal documents. John Pratt likens this to a property survey: “It can’t put right any deficiencies, but [it helps you] enter into the transaction with your eyes open.”

“One of the first things a solicitor may advise you about is not taking the franchisor’s word about what they tell you about the franchise business,” Wilkes explains

Should I take legal advice when raising franchise finance?

Legal advice is crucial when arranging finance, especially if personal assets are involved. Nadler explains: “Often an accountant or independent financial adviser’s advice does not look at all of the potential risks to the individual franchisee and their family. Good legal advice can protect families from difficult situations.”

Why is it important to have a franchise agreement checked?

Even standard form agreements should be reviewed. Nadler says: “A franchisor needs to have a number of controls in the agreement to ensure the uniformity of the system, quality of its products or service and the protection of its brand. Therefore, by its nature, the contract will be one-sided. However, it should also be fair to you and the franchisor.

“A British Franchise Association affiliate solicitor should be able to advise you if the franchisor has got this balance right.”

Can a franchise lawyer evaluate the franchise or review other legal documents?

While a solicitor cannot evaluate all commercial aspects of a franchise, they can provide essential legal guidance. Wilkes explains: “A franchise solicitor will have a general understanding of the commercial aspects of franchising. They should be able to give you general advice on the sort of information you may wish to try and obtain in order to get a better understanding of whether or not a particular franchise concept is likely to be a success for you.”

They can also review other agreements, like leases, provided the lawyer has relevant expertise.

In conclusion

Hiring a specialist franchise lawyer is essential for protecting your investment, understanding your rights and obligations, and managing risk.

From reviewing franchise agreements and leases to advising on finance and hidden costs, their expertise ensures you can make confident, informed decisions.

As Wilkes summarises: “When assessing a franchise concept as a whole, practical and commercial legal advice in relation to a franchise agreement should form an integral part of any franchisee’s due diligence process.”