FRANCHISING:
YOUR BUYING
CONSIDERATIONS
I
n the second of our
series of articles,
which provide legal
guidance for participants
in the fitness industry, we’re
sharing guidance from
Meridian Lawyers, who
regularly advise Fitness
professionals to help them
understand their risks, roles
and responsibilities in an
increasingly litigious and
regulated environment.
In this article, Michael Bracken and
Greg Bawden from Meridian Lawyers’
Corporate and Commercial team,
identify some of the key considerations
when buying a fitness franchise.
Franchise systems are prevalent in the
Fitness Industry. Buying a franchise has
a number of advantages, such as the
association with an established and
reputable brand or service, assistance
with setting up elements of the franchise,
initial management training and on-
16
going support via established policies
and procedures, and access to existing
business systems.
These advantages make buying a
franchise an attractive option - you’re
going into business “for yourself but
not by yourself”. However, can have
disadvantages too and whether
or not to buy a franchise is always
an important decision. As with any
decision of this magnitude, there are a
number of important factors to consider
and questions to ask, prior to signing
documentation.
5. Seek professional legal and
accounting advice from
practitioners who specialise in
franchising (both of whom will play
a crucial role in the buying process)
6. Understand the rights and
obligations of a Franchisee under
the Franchising Code of Conduct
7. Ensure you understand the
franchising relationship and your
rights and obligations under the
Franchise agreement
8. Ensure you have adequate financial
capacity, be that borrowing or
savings, to establish and to begin to
operate the franchise
9. Ensure you receive and adequately
evaluate all disclosure material,
including the Franchising Code
information
You should:
1. Satisfy yourself of the reasons for
wanting to own your own business 2. Be informed of the lifestyle and
income implications of owning and
operating a franchise 3. Asses, and narrow your options to
franchise opportunities that are
consistent with your reasons and
lifestyle goals 10. Select an appropriate franchise
system with which you are
comfortable, and commence the
application process
4. Conduct due diligence - research
the franchise system, request
information and talk to current and
former franchisees 11. Use the cooling-off period to check
your information and determine if
you still want to proceed with your
purchase.r purchase.
WHAT’S NEW IN FITNESS - WINTER 2018