Business Lawyers – What is Franchising?

What is Franchising? ClearWay Law has business lawyers in Toronto, Ontario. If you need a Toronto business lawyer, please call us toll free at 1-844-466-6529

Franchising is complex, and a lawyer can help you make sense of it all. We included some basis explainations below.

Application Form

The basic document you use to qualify prospective franchisees. Each buyer needs to fill this out at the start to show they are serious. It is the best way to determine if they meet the necessary financial and business needs and fit the culture of your brand.

Franchise Agreement

A legally binding contract between a Franchisor (seller) and Franchisee (buyer). Provides the owner with the legal right to set up a location, use the Franchisor’s product, name, programs and work with the system.

Operations Manual

A practical manual for franchisees providing them with almost everything they need to run their business. It is a reference manual during training and once they launch their location. Topics include logistics, office/store procedures, marketing tactics, financial metrics, systems, staffing, and the operational issues.

Learn more about business law: Toronto Business Lawyers

Franchise Disclosure Document

This document should be signed by potential franchisees before you provide full disclosure regarding your franchise system. This protects both parties regarding disclosed information to be used only during discussions of becoming a franchisee. Although often US-based, many Canadian firms are using it.

I can provide these documents, customized to your brand for less than $9,000 and this can get you started quickly and efficiently. We have the experience to do this for you.

What is franchising? You grant a license that gives the franchisee the right to use your trademark, brand and operating systems after paying your basic franchise fee. A license usually has a contractual, fixed term.

Considering franchising, here are some necessities:

  • Your business must be clone-able
  • You must be able to support all franchisee owners
  • Your franchisees must be committed to selling your goods or services
  • You need an existing system in place that can be transferable
  • You must be a great leader and mentor/coach your franchisees

Royalties provide support for franchisees.

Fees are collected monthly/quarterly, based on gross sales and used for:

  • Research and Development,
  • Sales and Marketing strategies, tactics
  • Technical resources – computers, accounting programs, networking
  • Training and support all year

What is Franchising? Want to learn more about law? Visit our YouTube!

Our franchise lawyers have experience in working with large franchise operations as well as with start-ups.

Franchising is not for everyone. If you have a single business location and are happy with the results, fantastic!  If, however, you are the crossroads of how to take the next steps and franchising may be a consideration… it’s worth exploring!

What is Franchising? Contact us toll free at 1-844-466-6529 to book a meeting with a business lawyer.

Toronto Business Lawyers

Our lawyers can help all kinds of companies:  accounting practices, in-home tutoring services, supplemental education schools, print and media shops, cleaning companies, nutrition stores, fitness outlets, coffee shops, restaurants, clothing stores, and more.

There are several ways that you can start up a franchise business. You could go with a bricks and mortar (meaning a storefront or retail type of business) or you could develop a home-based business.

Some of these decisions are based on your available finances, some are based on your desire to maintain a smaller footprint in terms of employees or lifestyle and some may be due to specific expertise that fits the franchise.

Business Lawyers- What Is Franchising?

Starting out in a home-based office during the first year and expand to a larger space and infrastructure in the second or third year can be a good idea. It is a great way to keep costs in line as you market yourself and the brand you have selected. Moving up to an office is simple and there are many options once you are ready. These franchise operations are set up to help you front the start.

What is Franchising?

Our franchise lawyers enjoy the luxury of working with all three of these types of enterprises. It means we can most often match you with the right business opportunity, depending on your circumstances.

It costs money and resources to franchise.

You need to have money to expand. In order to take the first steps, you will need documentation:

  • Franchise Operations Manual
  • Franchise Collateral and Marketing Materials
  • Application Forms
  • Franchise Agreements
  • Disclosure Agreements For Franchising

Franchise resources

You will also need the resources to support your franchisees. A team of knowledgeable staff will make the difference with happy franchise owners. There is training to consider for the new owners, how to address lead generation and lead management, finding a perfect location and many other items. After all, you want your “zees” to be successful as quickly as possible. You have entered into a long-term relationship and the future of your brand depends on successful arms of your business.

How do you establish a price for the initial Fee? What royalties do you charge? Should the marketing fund be 2% or more, or less. And most importantly, how will you invest the marketing funds you collect? It is an art and a science that can be very expensive. If you collect $100k every year, should you spend it on advertising in industry magazines, in business journals, radio, on-line?

It is a common saying in franchising that you are in business for yourself, but not by yourself. Therefore we look at franchising as a balance between being an employee and starting your own business from scratch. Be your own boss today!

Toronto Law Firm

The main issue when you start a new company is building your brand and teaching the market about what you do or sell. If you open a Subway in Toronto, you don’t need to spend a lot of money teaching people what a Subway offers. Instead, you can just focus on providing the best customer service possible and letting customers know where you are located.

Amyn Ali bought into a Wing Zone franchise eight years ago in the Chicago area because of the simple turn-key operations that franchising offers. Ali knew that purchasing a franchise minimizes risk instead of going into business on your own. Amyn now owns three Wing Zones locations, ten Dunkin’ Donuts and one Papa John’s franchise.

*They were not one of our clients.

What is Franchising? Contact us via the live chat function in the bottom right of the screen to learn more.