Sharing a business through Franchising
Has anyone ever asked you if they can "buy into" your business?
A business has been approached by a third party who has expressed interest in buying into their business.
This prompts the business owner to consider if and how they could include the interested party in their business.
The reality of the situation is that a business cannot choose whether to call themselves a franchise.
Franchising is a regulated industry and is governed by the Franchising Code of Conduct. If you are operating within certain parameters you are by definition a franchise and have to conform to the franchising code.
Nor can you engage a franchisee without having provided the legally required franchise documentation.
What are the franchising parameters?
A franchise exists by definition when;
Simply because a business is called a licence or distributorship does not mean it cannot be a franchise. If a licence or distributorship meets the above definition, it is most likely a franchise and must comply with the code.
Franchising is not a dirty word
So what if the system that suits your business best should fall within the franchising definition? Well don't be scared, franchising is nothing to fear if approached professionally.
In fact. franchising your business could be the best thing you ever did!
Franchising is an involved process which necessitates expert input. It is not a quick procedure and cannot be "rushed through".
Contrary to many business owners' belief, there is no need to wait for a potential franchise buyer before proceeding with the franchising process.
Having a potential buyer in the wings is a comfort, but is not the norm.
Are you concerned that your existing business may fall within the franchising definition? What could the consequences be?
The ACCC has the power to prosecute any deemed franchise that is not complying fully with The Franchising Code so act decisively;
The benefits of franchising are numerous;
The advantages are plentiful.
Could franchising be your vehicle to success?
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