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6 Tips for New Franchisees 

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Starting a new franchise can be an exciting prospect. As you take the reins of a business under the umbrella of the franchisor’s established brand, you lay the groundwork for your new business venture. However, any franchise location also carries its share of complexities, especially in the initial stages. This article will explain tips for new franchisees, helping you to understand your obligations as a franchisee and navigate industry best practices. 

As a new franchisee, you will have recently signed the franchise agreement. This document establishes the relationship between you and the franchisor. It is a binding contract, and as a result, you will have legal obligations. You need to comply with all of your contractual obligations, including aspects such as:

  • payment schedules; 
  • intellectual property rights; 
  • reporting requirements; and 
  • operational standards. 

You should thoroughly review the franchise agreement and discuss the terms with a legal professional to ensure you understand your obligations. Clarity from the outset of your franchise journey can prevent misunderstandings and later disputes. A lawyer can also help you identify and address potential legal risks from your franchise operation, such as:

  • liability issues;
  • health and safety concerns; and 
  • employment law compliance.

2. Comply with Disclosure Requirements

The franchisor might have asked you to sign a non-disclosure agreement (NDA) during recruitment. Signing this contract will restrict you from disclosing certain information about the franchisor and its franchise network. You must comply with these disclosure requirements to avoid legal consequences. 

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3. Accept the Franchisor’s Offers of Training and Support 

The franchisor will set out the training and support provisions in the franchise agreement. The training often covers essential aspects such as:

  • operational procedures;
  • brand standards;
  • marketing strategies; and 
  • customer service protocols. 

Their support will take the form of ongoing guidance and assistance. 

You should accept their training offer and engage in training sessions and materials. The training will help you run your franchise location by providing valuable insights into the franchisor’s business model. The franchisor’s support and the knowledge you gain from training sessions can help you navigate any challenges you may encounter during the early stages of running your new business. 

Actively engaging in the franchisor’s training and utilising their support can also demonstrate your compliance with the contractual obligations outlined in the franchise agreement. Your compliance can potentially mitigate the risk of disputes or breach of contract. 

4. Seek Feedback

It is a great idea to stay proactive and continuously seek opportunities for improvement. You should regularly ask for feedback from stakeholders such as:

  • the franchisor; 
  • your employees; and
  • your customers. 

Seeking feedback allows you to gain further insight into what works well and what areas need improvement. Understanding different stakeholders’ perspectives will enable you to adjust and improve your performance. Actively asking for feedback and acting upon it demonstrates your commitment and willingness to adapt in your pursuit of long-term success. 

To continuously improve, you should not only adapt to feedback but also respond to market and industry changes. Regular market research and strategy evaluation can help your location keep its competitive edge. 

5. Network with Fellow Franchisees 

You can connect with other franchisees in the network to share:

  • insights;
  • best practices; and 
  • lessons you have learned. 

Franchisees within the same network can provide valuable support and guidance along your new franchise journey. 

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6. Seek Advice for Disputes

Your franchisor should establish a clear dispute resolution framework in the franchise agreement. You should follow this framework if you encounter any disputes during your franchise’s operations. Whether the dispute arises in the early stages or later down the line, seek legal advice. A lawyer can help you understand your options and protect your interests.

Key Takeaways

Embarking on a new franchise venture is an exciting opportunity with unique challenges. These tips for new franchisees can help you more effectively navigate the complexities of your early franchise journey. Franchise success requires dedication, commitment and a willingness to learn. With the right approach, you can increase your location’s chance of success and achieve your long-term business goals. 

Tips for new franchisors include the following:

  • understand your legal obligations;
  • seek advice about the franchise agreement; 
  • if you signed an NDA, comply with your non-disclosure obligations; 
  • accept the franchisor’s offers of training and support; 
  • seek feedback from the franchisor, your employees and customers; 
  • network with other franchisees within the franchisor’s network; and
  • seek independent legal advice if a dispute arises. 

If you are a new or prospective franchisee who requires legal advice, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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Jessica Drew

Jessica Drew

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