More Franchising FAQs
Date: February 18, 2011
Franchising is a business system. It involves one party (the franchisor) granting another (the franchisee) the right to operate a replicated franchise business under that trade name and use established management, marketing and operating procedures. In return the franchisee commits to paying the franchisor a capital investment, ongoing fees and complying with franchise procedures.
Franchising in Australia has been regulated by the Franchising Code of Conduct since July 1, 1998, which is administered through the Australian Competition and Consumer Commission (ACCC).
The Code provides for a number of franchisee protection mechanisms including:
- Mandatory disclosure of information from the franchisor, including financial details, directors’ interests, franchisee list, and litigation information;
- Seven-day cooling-off period after signing the contract;
- Recourse to mediation in the event of a dispute; and
- Free association of franchisees.
Some frequently asked questions in relation to franchising are as follows:
What's in a franchise agreement?
Who is the Franchisor?
Who is the Franchisee?
How long does a franchise last?
How much does a franchise cost?
Should I talk to other franchisees?
The franchise is supposed to be a "goldmine" how can I tell?
Can I negotiate the franchise agreement, or is it "take it or leave it?"
Do I have to get professional advice before entering into a franchise Agreement?
