Your franchisor may have the ability to compete with you online. As a franchisee, you won’t necessarily have the choice of where you buy the products you need to run the business, even if you believe you can get those products for a lesser price somewhere else. An agreement may allow the franchisor to terminate the agreement even if there hasn’t been a breach by a franchisee. Some locations are better for some businesses than others (i.e. consider a shopping centre versus a main street). The economy has its ups and downs. Whether the business is a fad or should it pass the test of time. You may not have an automatic right to renew your agreement once the initial term is over. You should think about what happens at the end of the agreement:- Will you be able to recover your outlay and make a profit during the term of the agreement? What are your rights and responsibilities around renewing your franchise agreement? What are the rules about you selling your business? Are there any restrictions on you starting a similar business if you want to? The Australian Competition and Consumer Commission (ACCC) administer and enforce the Franchising Code. For example, the ACCC can provide information on how supply arrangements work in a franchising relationship. Further information Further information on franchising can be at http://www.accc.gov.au or by calling the ACCC Small Business Helpline on 1300 302 021.
Your franchisor may have the ability to compete with you online. As a franchisee, you won’t necessarily have the choice of where you buy the products you need to run the business, even if you believe you can get those products for a lesser price somewhere else. An agreement may allow the franchisor to terminate the agreement even if there hasn’t been a breach by a franchisee. Some locations are better for some businesses than others (i.e. consider a shopping centre versus a main street). The economy has its ups and downs. Whether the business is a fad or should it pass the test of time. You may not have an automatic right to renew your agreement once the initial term is over. You should think about what happens at the end of the agreement:- Will you be able to recover your outlay and make a profit during the term of the agreement? What are your rights and responsibilities around renewing your franchise agreement? What are the rules about you selling your business? Are there any restrictions on you starting a similar business if you want to? The Australian Competition and Consumer Commission (ACCC) administer and enforce the Franchising Code. For example, the ACCC can provide information on how supply arrangements work in a franchising relationship. Further information Further information on franchising can be at http://www.accc.gov.au or by calling the ACCC Small Business Helpline on 1300 302 021.
information-statement-for-prospective-franchisee.docx