WNiF Magazine - Winter 2018 Edition - Page 16

FRANCHISING: YOUR BUYING CONSIDERATIONS I n the second of our series of articles, which provide legal guidance for participants in the fitness industry, we’re sharing guidance from Meridian Lawyers, who regularly advise Fitness professionals to help them understand their risks, roles and responsibilities in an increasingly litigious and regulated environment. In this article, Michael Bracken and Greg Bawden from Meridian Lawyers’ Corporate and Commercial team, identify some of the key considerations when buying a fitness franchise. Franchise systems are prevalent in the Fitness Industry. Buying a franchise has a number of advantages, such as the association with an established and reputable brand or service, assistance with setting up elements of the franchise, initial management training and on- 16 going support via established policies and procedures, and access to existing business systems. These advantages make buying a franchise an attractive option - you’re going into business “for yourself but not by yourself”. However, can have disadvantages too and whether or not to buy a franchise is always an important decision. As with any decision of this magnitude, there are a number of important factors to consider and questions to ask, prior to signing documentation. 5. Seek professional legal and accounting advice from practitioners who specialise in franchising (both of whom will play a crucial role in the buying process) 6. Understand the rights and obligations of a Franchisee under the Franchising Code of Conduct 7. Ensure you understand the franchising relationship and your rights and obligations under the Franchise agreement 8. Ensure you have adequate financial capacity, be that borrowing or savings, to establish and to begin to operate the franchise 9. Ensure you receive and adequately evaluate all disclosure material, including the Franchising Code information You should: 1. Satisfy yourself of the reasons for wanting to own your own business 2. Be informed of the lifestyle and income implications of owning and operating a franchise 3. Asses, and narrow your options to franchise opportunities that are consistent with your reasons and lifestyle goals 10. Select an appropriate franchise system with which you are comfortable, and commence the application process 4. Conduct due diligence - research the franchise system, request information and talk to current and former franchisees 11. Use the cooling-off period to check your information and determine if you still want to proceed with your purchase.r purchase. WHAT’S NEW IN FITNESS - WINTER 2018