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How to work with your lawyer


When purchasing a franchised business, it is highly advisable to obtain advice from a franchise lawyer, as it is a decision that should not be made lightly and requires careful consideration.

However, before you instruct your lawyer, you should remember the following five points:

1. Engage a lawyer with experience in franchising If your lawyer does not have any franchising experience, then you will be inadvertently paying them to learn franchising. They may also miss some of the intricacies in relation to the franchising documents.

2. Ensure you know the total legal costs 

All lawyers are bound by the relevant State or Territory’s disclosure rules for lawyers. This includes providing estimates of costs upfront prior to commencing to act for you.  Many lawyers in the franchising industry will provide advice on a fixed fee basis, which makes it more transparent and easier to budget for.

3. Do your own due diligence

  • Research the franchise sector, the particular franchise system you are looking to buy and its competitors.
  • If the franchise you are interested in is premises-based, ensure that you have researched the site to confirm that it is located in a prominent location with adequate foot traffic.
  • Consult with an accountant in relation to all costs involved and listed in the franchise agreement and the lease, prepare a budget and draw up projections of profits and cash flow.
  • Have a look at the legal documents yourself to see whether the duration of the franchise agreement corresponds with the duration of the lease.
  • Speak with current and former franchisees, who will always be your best source of information about the franchisor and the franchise system.

4. Consider your personal circumstances and set of skills

Your lawyer will need to know your personal circumstances as the business you end up buying must be suitable for your personal circumstances and family commitments. Furthermore, your set of skills may not be suitable for the industry or a business that you have chosen or you may be required to undertake further training and obtain further qualifications.

5. Be prepared

Unless your lawyer works on fixed fee bases, you need ensure that you:

  • Provide your lawyer with all the relevant documents in a timely fashion
  • Make a list of questions that you want answered in addition to the general advice to be provided in relation to the franchising documents
  • Refrain from calling and / or emailing your lawyer excessively as it may be reflected in your bill.

The main thing to remember is that communication is one of the key aspects to a successful working relationship between you and your lawyer. It is vital that your lawyer has all the information which is relevant to the purchase of the franchised business you have chosen. Lastly, ensure that you carefully consider the legal advice and take it on board.

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