It is essential for someone who may be contemplating establishing a franchise system to be fully conversant with all the legal requirements and terminology early in their investigation process.

If you have an existing business that meets the criteria of a Franchisable concept, there are a number of steps you need to take before you visit your (or our) solicitor.

Stand back from your business and look at it as a consumer would. Is the name, the logo, the colours and the slogan recognisable and indicative of the products or services you provide? The last person to give you an unbiased opinion is yourself, then your partner. Your kids can be pretty blunt and can also let you know how the younger generation view your image.

Is everything systemised? Have you read the “E-Myth Revisited” by Michael Gerber. You need to systemise everything. You can pay to get this done but it’s expensive. Enterprise 21 can give you the guidelines and templates to help you.

What infrastructure have you in place? How many Franchisees can you install with your existing support group? How many Franchisees can you support with one Franchisee Support Manager? This will help you to do some forward budgeting and costing.

Have you done a personal appraisal on your skills as a Franchisor? Remember the skills you need as a successful Franchisor can be decidedly different from those required as a small business owner. List your personal skill sets and areas of lack and decide which of those you lack you can fix up with training. The others you need to clearly define and plan to employ those who can perform these duties professionally.

Have you got the correct legal structures in place? Your legal structure for a Franchise system also needs to be a little more complex than a normal small operation. As soon as you launch your franchise you have some potentially very valuable Intellectual Property. This needs to be safeguarded and your financial assets also need to be protected just in case the worst happens. You accountant (if they are good) should be able to help in this area.

Most people might now call on their solicitor. We feel strongly that this is not the best move. Solicitors are absolutely essential in producing the legal documents but most will not really have a clue as to how a business operates from the psychological viewpoint of the Franchisor, the Franchisees and the public. Every business is dependant upon marketing. How to market the products, the Franchises, potential purchasers of you established Franchise.

Enterprise 21 are not solicitors. We have worked with many solicitors over the years and for the last 7 – 8 years we have actually constructed Franchise Agreements and Disclosure Documents then passed these to our solicitors for “legalisation”. We believe that the legal documents should be simple, written in non legal terminology where possible and reflect a win-win scenario.

We prepare all of the necessary systems and legal documentation for you, including, but not limited to:

• Franchise Agreement and Disclosure Document (to solicitor approval level),
• Sales and marketing for sourcing Franchisees,
• Franchisee Selection systems,
• Non-technical training,
• Franchisee Sales and Marketing systems and techniques,
• Administration systems

Also included with this service is a full suite of ancillary documents essential to the commencement and operation of a successful franchise business system. (Here is a full list of franchise construction documents.)

You’re probably wondering how much this is going to cost, and I can tell that if we did everything for you (except for the legal documents), the fees would start from $20,000. (See our fee structure here.)