2. Know the legal requirements of the franchise

It is essential, if you are going to franchise, to know in depth the legal requirements and especially the franchise agreement. This contract does not currently have its own standard. To know how to franchise a company you must know at least basically the legal norm that surrounds it.

Thus, the definition of the franchise is found in https://iclg.com/practice-areas/franchise-laws-and-regulations/england-and-wales and https://www.thebfa.org. They define exactly the businesses that are developed under franchise maws and regulations.

According to this article, the commercial activity under franchise is carried out under an agreement or contract whereby a company, called a franchisor, yields to another, called a franchisee, the right to operate its own system of marketing of products or services.

What are those requirements?

In this way, every franchisor should know that franchise contracts have to meet minimum requirements:

1. The use of a common denomination or label or other intellectual or industrial property rights.
2. A uniform presentation of the premises or means of transport object of the contract.
3. Communication by the franchisor to the franchisee of some technical knowledge. A "know how" or know-how, which must be proper, substantial and unique.
4. The benefit continues by the franchisor to the franchisee of a commercial, technical or both assistance. All this during the term of the agreement. And all this without prejudice to the supervisory powers that may be established contractually.

On the other hand, there was previously an obligation for franchising companies to franchise when registering in the Franchisor Registry. With the disappearance of such registration, this requirement also disappears.

Another of the legal requirements to take into account is the obligation to present the franchise dossier or pre-contractual information to the potential franchisee. Always before signing any type of contract or agreement.

Legally, it also indicates the conditions and the minimum information that the future franchisee must possess and know before signing the contract. Therefore, the franchise dossier must include, at least minimally, the following elements:

1. Identification and data of the franchisor.
2. Description of the activity sector of the franchise business.
3. Content and characteristics of the franchise and its exploitation.
4. Structure, extension of the network and essential elements of the franchise agreement.

However, to advise and assist in this process, and to ensure that you comply with the law, we recommend working with a franchise consulting company such as Inner Circle. This will likely save you future headaches and facilitate franchising your company.