Starting a franchise business is not as easy as it may seem. The concept of franchise demands a high degree of cooperation from both the franchisor and the franchisees. The general concept of franchising is rather complex and may take time for interested parties to adequately grasp the underlying dynamics and the prevailing norms. It is therefore important for anyone aiming to start a franchise to take a critical look at what it entails before delving into it. For a franchise business to be successful, it requires a high degree of cooperation by all the parties involved, the failure of which can be disastrous not only for the franchisor but also for the franchisee. Thus, for a franchise to succeed, it must be well-structured, and well-managed, and most importantly the legal roadmap must be well-defined.
There is a myriad of legal issues that need to be considered before starting a franchise and where the available resources permit, the interested party should endeavor to check each of them off their list of pre-commencement activities. However, due to budgetary constraints that most new franchises face, it may be difficult or impossible to go through the list in one fell swoop, thereby making it necessary to prioritize by drawing up a legal road map that helps navigate the issues one step at a time, focus on the areas of risk first and consider the legal issues which don't cost much now but maybe expensive down the line if not tackled immediately.
This article aims to take an in-depth look at some of the legal issues that need to be addressed to ensure a successful new franchise.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.