LISTEN before you buy
All franchise agreements put a lot of power in the hands of the franchisor. Whether a franchisor uses that power wisely or carelessly comes down to their character. Their character will have a huge impact on your experience as a franchisee and may be the most important thing you should assess before buying a franchise. It’s also the hardest thing to assess. But you can learn a lot by asking smart questions of other franchisees and listening closely to how they answer. Ask about how the franchisor communicates and how they act when challenged or wrong, how they introduce change, how they respond to franchisees struggling under personal circumstances and how they demonstrate that they have their franchisees’ best interests at heart.
LOOK BEFORE You’ll begin to get a sense YOU of how LEAP things really operate in that franchise system.
Franchising is a powerful way of doing Michael Bright business, but the same forces that make Specialist Franchise Lawyer franchising great also create vulnerability 021 2666 395 and risk. We know what works, what doesn’t, and how to respond to the issues that arise. We help with: · Assessing franchise opportunities · Advising on franchise agreements and other contracts · Franchise sales and purchases · Dealing with difficult situations
FRANCHISE LAWYERS North Shore Phone 09 414 9800
www.gazeburt.co.nz
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go in with your
EYES WIDE OPEN Buying a franchise can be a great way to get into your own business – but there’s still an element of risk involved. That’s why using the right advisors is essential, says Simon Lord
I
f you’re thinking of buying a franchise, you’ll find you have a huge range of opportunities to choose from. There are around 600 different franchises in New Zealand, and they cover a huge range of industries and operating styles, from man-and-a-van operations to multi-million-dollar restaurants. Many of our best-known and most-trusted brands are franchises.
Listen to what is said, how it is said and what is perhaps glossed over.
Auckland Phone 09 303 3764
Buying A Franchise
But just because a franchise is well-known doesn’t mean that it will suit your own situation, and it doesn’t mean that every new outlet will be profitable, either. That’s why, if you’re looking at buying any business, you need to take good professional advice so that you can be sure you’ve made the right decision and enjoy the peace of mind you need to focus on growing your new business. Strangely, many people don’t bother to do that when it comes to franchises. Why not? Well, having talked to many new franchisees, it seems that too many people: 1. Assume that everything will be okay because the franchise has a good reputation; 2. Think that by not using a lawyer or accountant they will save money on professional fees that they need to invest in the business; or 3. They use an inappropriate advisor – the family lawyer, for example – who might be great at conveyancing but have little experience and few contacts in the franchise world. Alas, the people who take these appealing shortcuts often learn an important lesson the hard way. While franchising can be a great route into business for many people, it’s not right for everyone. Research carried out in Australia several years ago found that 20 percent of respondents admitted that they had no idea of what they were getting into when they bought a franchise. It suggested that people are prepared to pay $50,000 or $200,000 for a franchise, but they are not prepared to spend the time or money they should on finding out what they are getting into. Franchise New Zealand
Autumn 2022
Year 31 Issue 01
