Common Pitfalls of Franchise Agreements
How to Avoid Common Pitfalls of Franchise Agreements
Entering into a franchise agreement, like joining the Time For You Franchise family, is an exciting step. But it's not without its challenges.
Misunderstanding fees can be one major pitfall. Some may assume they only have to shell out the initial cost for their enterprise. However, franchises often have ongoing fees for marketing or royalties that you'll need to budget for.
To avoid this mistake, make sure you fully understand all financial commitments before signing anything. The FTC’s guide on franchising offers great help in understanding these aspects better.
Lack of Legal Advice
Another common error is not seeking legal advice when dealing with franchise agreements. These documents are legally binding contracts and can be complex - so getting them checked by a professional could save you from potential problems down the line.
We strongly advise involving a solicitor who specializes in franchising law at early stages itself. The Law Society has a useful tool to find such experts across UK regions which could come handy here.
Failing To Plan Ahead
The last big pitfall we're going to look at today involves planning – or lack thereof. Many entrepreneurs rush into business ownership without contemplating the potential consequences of a less than desirable outcome.
A robust exit strategy should be part of your initial business plan.
To avoid this pitfall, consider scenarios like selling the franchise or transferring it to someone else. This is where clauses related to termination and transfer in the agreement become crucial. The British Franchise Association provides a comprehensive guide on these matters which could serve as an excellent starting point for planning ahead.
Key Takeaway: Entering a franchise agreement can be thrilling, but watch out for pitfalls. Don't just focus on the initial fee - budget for ongoing costs too. Always get legal advice before signing contracts and make sure you've got an exit strategy in place.
