Franchisees - Can We Help You?

As a potential franchisee you may be commercially inexperienced and the world of franchising may initially bamboozle you.  What you need is a supportive, practical, accessible and experienced team of advisors who can smooth the way to your business success.  At Davenports Harbour, we are that team.

What we aim to do

• It is not our aim to poach all your work from your existing lawyer – in fact we hope that we can work with your existing lawyers, keeping them up to date with the work that we are doing for you.  Rather, we are franchising specialists and our aim is to work with you to ensure that you have the best business possible.
• Law and franchising practise is always evolving.  That is where we can help – as franchising experts, it is our job to know exactly what’s going on in the law books and the market.
• As we act for both franchisors and franchisees we have a comprehensive understanding of franchising and are well placed to provide pragmatic, thorough and cost-effective advice.  In fact, we have had feedback that franchisors appreciate the advice we give over less experienced firms as it means their franchisees understand their commitments and obligations under the franchise agreement which reduces the likelihood of disputes further down the track.

How we do it

• First steps – the deal:  Once we have agreed with you the scope of our work, the first thing we will do is discuss with you what you expect to be getting as a franchisee i.e. the deal that you understand you have struck. 
• Once we understand your expectations, we will review the franchise agreement and the other related documentation and provide a report for you at a fixed fee.  The report would be comprehensive and outline all the “fish hooks” in the documentation. 
• The report is intended to be a quick reference guide for you, summarising your rights and obligations under the franchise documentation.  We prepare the report in such a way that you can provide it to the franchisor to serve as a discussion document for negotiation without causing offence and getting off on the “wrong-foot”.
• Negotiations:  Franchise agreements are notoriously non-negotiable as franchisors generally require uniformity across their franchise system.  However, with our experience we are familiar with resolving issues in such a way that we protect your interests but avoid any unnecessary disharmony between you and the franchisor.
• Introductions to other industry players:  We have an expansive network of other experts in the franchising industry and we take an active role in introducing our franchisee clients to those which we believe can add value to your due diligence investigation.  Those experts range from accountants, bankers, marketing experts, fit-out and merchandising experts and other franchisees.
• Our relationships with franchising experts prove invaluable, as we often find ourselves responsible for liaising with and co-ordinating all the experts to ensure that client project deadlines are met and acting as the project overseer to ensure that no holes are left unplugged.  Our relationships mean that more often than not we know the experts and can undertake this role in an efficient manner.
• One of the most important things you should do before committing to a franchise business is speak to a good accountant.  The accountant should understand the franchising industry and be able to ascertain whether the budgets and forecasts provided by the franchisor are realistic.  Statistics show that 95% of franchise litigation arises from the expectations created by budgets and forecasts provided by the franchisor.  Therefore, it is imperative that you have a good, experienced accountant look at that financial information.  We can put in touch with such an accountant.
• The other first steps:  Other matters where we can assist you include incorporating a company to be the vehicle that operates your business, taking a lease or sublease of the business premises and, where you are buying an existing business, negotiating the agreement for sale and purchase. 
• Disputes:  Even within the most successful franchise systems there will be disputes between franchisors and their franchisees.  We can advise you on such disputes and will in all cases endeavour to have them resolved in a satisfactory manner before costly dispute resolution clauses within the franchise agreement are evoked.  In the event that the dispute does progress to litigation we have contacts with several litigators experienced in franchise disputes.