|Over the years we have helped our clients with legal services that cover the entire gamut of franchising their businesses. Very often, we also come across business owners, who have created a P&L sheet along with a return on investment (ROI) plan for the franchisee and a franchise agreement and believe they are franchise ready. They have then gone a step further and have made a few franchisees and are now working the nuts and bolts of how to get the act right. It must be noted that most businesses fail here. It is very important to create first the right franchise strategy and create that with experts. Once the foundation is laid you work on the systems and processes, create franchise manuals and iron out everything that the franchisee would not be able to do or needs to compulsorily finish. You then define clearly your role, responsibility as a franchisor and then go about hiring a professional to create a franchise agreement. Do not copy your competitor or follow any similar business, as we have seen every business is unique and has to address its own need on a customized basis taking into consideration its own strengths, weaknesses, goals and market strategy, instead of aping any other business format.
It is very essential to have the correct roles and responsibilities defined and ensure that the entire business is well protected. At the same time, we have seen a lot of prohibitive clauses in the franchise agreement that does not go very well with the franchisees. While the franchisor is always concerned of safeguarding the entire business, the franchisee on the other end is very wary of the fact that they might not be well protected. Having interacted with so many franchisees, we always advise the franchisors to ensure that they have an agreement, which complements their business growth, and help them achieve the expansion they are seeking without compromising on any legal issues. It must be noted that the Indian cultural, geographical and jurisdictional landscape has its own challenges with so many underlying adherences to different taxations and direct obligations to different departments. We ensure that the legal framework of the franchisor is built on a strong foundation, ensuring that the franchise business is insulated and well protected from all legal complications. We also ensure that this just does not include the franchisor, but also the franchisees interest, the employees well being, as everybody within the eco system must be well protected ensuring that franchise business works within the legal framework of the country and makes the most of it.