Franchising Legal Advice

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Specialist legal advice on franchising and franchise contracts

Franchising legal advice is specialised and differs from other areas of law, thus you need find yourself an attorney that specialises in this specific type of law. Franchise attorneys represent the franchisor, as well as the franchisee. Smit & Van Wyk specialist franchise attorneys provide both franchisors and franchisees assistance and legal advice.

Franchise Contract / Franchise Agreement

A franchise contract is a legal, binding document or agreement between a franchisor and franchisee. To start, or buy a franchise will require a franchise attorney to setup the franchise contract and other legal documents. The franchise relationship between a franchisor and franchisee will mostly be controlled and governed by the contract. There will be provisions in the contract that will have a direct impact on how you run your business. Franchise contracts may be for fixed terms or a specified amount of years. How a franchise agreement is setup depends on the type of franchise being bought and sold. No franchise agreement will be the same and the agreement will include provisions that will have a direct impact on how you run your business. Franchise contracts also specify the method of operations, business system requirements, suppliers, and advertising specifications. 

Franchise Fees

The franchisor sets the fees and franchise fees can vary greatly. The franchise fee is an up-front, one-time fee charged at the beginning of the process. The franchise fee will be due when you sign the franchise agreement. A cash down payment is common, with a loan financing the balance. These fees are usually non-refundable unless the franchise agreement states otherwise.

Royalty Fees

The franchise contract will include continuing royalties or continuing fees made over the life of the franchise contract. Royalties are a key element when you’re looking at a franchise or negotiating your contract. Royalty fees will impact all business operations and profits. Royalty fees are paid to the franchisor periodically. The franchise agreement states how much you’ll pay and when. Royalty fees are tied to your sales of products or services. Payments may be due weekly, monthly or quarterly.

Why pay Royalties?

Royalties often cover items such as ongoing training, updates to manuals, advertising and promotions.

Advice and Services

Smit & Van Wyk legal services include drafting franchise agreements and franchise licenses. We also provide professional advice on how to start a new franchise, and buying from an existing franchise corporation. For the best franchising legal advice regarding franchising, it is recommended that one should use a qualified and experienced franchise attorney, who is registered with relevant associations and industry groups.