Franchising is flourishing, with a large number of businesspeople looking to embark on their own venture. Patrick Wood, Partner and Head of Franchising at Fraser Brown Solicitors, covers what franchisors should remember when bringing new franchisees on board.

The Franchise Agreement is the cornerstone of any franchising transaction. Keeping it updated with new legislation and good practice is vital. This demonstrates the quality of the agreement and reinforces your reputation. Bear in mind that existing agreements cannot be altered without the franchisee"s consent.

The terms of the franchise agreement should clearly set out the application of "step-in" rights that can be exercised, also termination rights that apply in the event of the franchisee"s insolvency or other issues.

Remember that the Franchise Agreement is likely to be linked to the Operations Manual and therefore changes should be reflected in both. Other template documentation such as order forms, letterheads etc should also be reviewed whenever a new franchisee starts.

Unfortunately not every franchise will thrive. Keep a close eye on new recruits and watch for signs such as slow or non-payment for stock and failure or delays in attending meetings or reporting. Do not be afraid to address these issues.

For new franchisees, many of the issues they have to deal with may be new and alien to them. Therefore you should always recommend they seek professional legal and financial advice.

For further information regarding franchising please contact Patrick Wood on 0115 9471 510 or email pwood@fraserbrown.com