Franchising

What Are Mediation & Arbitration Clauses for Franchises?

 

A franchise agreement is a legally bound agreement outlining the franchisor’s terms and conditions for the franchise. Additionally outlined are the obligations of the franchisor and the obligations of the franchisee.

Mediation Clause

Mediators are facilitators, who work with both parties to create a solution to the problems between the parties.  However, the mediator does not make the decisions for the parties, the parties do. When a dispute arises, it is beneficial to have a mediator at your disposal. They will work to achieve with the parties, a mutually acceptable resolution to the dispute.

Arbitration Clause

Any dispute or controversy to arise in connection with the agreement, between the parties, are to be decided by an arbitrator (agreed upon by the parties). It is a binding legal process where parties have submitted, by written agreement, that a dispute between them be resolved by a neutral, third party (the arbitrator).

Mediation and Arbitration Clause Combined

In default of resolution at the mediation, the dispute is to be determined by an arbitrator agreed on by the parties. If you’re interested in purchasing a franchise, get the help you deserve. Contact Law Works in Guelph, they can help you solve disputes easily with a team of professional franchise lawyers. 

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How to Find a Franchise Lawyer

As a franchisor, one of the most critical decisions you will make is choosing the right franchise attorney. Franchise lawyers are essential for any franchise owner: documents crafted by your attorney, advice and legal guidelines provided, all having a huge impact on your business. They can determine the most effective ways to run your business while ensuring that your operation isn’t violating any laws. How can you ensure you’ve found the right franchise lawyer?

A critical factor is to receive multiple referrals from franchise professionals. If you choose to search for the perfect franchise lawyer yourself, a crucial determining factor is the amount of experience the attorney has. You want them to have franchise law as their area of practice and many years of it.

Once you have selected the attorneys for consideration, it is important to ask questions that are essential to you as someone who will be franchising a business:

Transactional vs. Litigation Focus

You need a lawyer who is focused on the transactional side, to focus their practice on the preparation of your legal documents. However, a benefit with a lawyer having a litigation practice is them being able to represent you if needed.

Flat Fee vs. Hourly

The benefits of working with a flat fee franchise lawyer are that their fees are predictable and often maybe financed over a few months, also if the case takes more time you benefit, however, this can also be negative in the reversed scenario.

Industry-specific Knowledge

You need someone who is knowledgeable specifically in your industry and who knows additional regulations that impact a business.

Firm Size

A larger firm might be able to do more for you and bring in resources, such as a specialist to help with other transactions or work. They also could have more connections however, a smaller firm will provide you with more access to a partner level attorney and may be cheaper.

If you’re interested in purchasing a franchise, get the help you deserve. Contact Law Works in Waterloo, they can help you solve disputes easily with a team of professional franchise lawyers.

3 Things To Consider Before Signing Your Franchise Agreement

Franchises offer a balance between the freedom of starting your own business and the stability of an established brand. Unlike starting a business from scratch, purchasing a franchise offers access to resources, capital, brand identity, and other extremely helpful assets that can help your business thrive. However, there are a few things you should consider before signing your franchise agreement and opening your new franchise:

How much will it cost?

Starting a business can be extremely expensive, which is why franchising can be such an attractive opportunity. While the costs are still substantial, you may be able to get funding from the franchisor or use the brand’s reputation to help obtain a loan from a bank. Before signing your franchise agreement, make sure to consider exactly how much it’s going to cost and how you’re going to finance this new venture.

Is it right for you?

Franchising exists in a number of industries, not just fast food. As a potential business owner, determine whether your skill set and passion align with the needs and goals of the franchise. While it’s possible to run a successful franchise with no prior experience, being passionate or knowledgeable about the industry before signing your franchise agreement can be extremely helpful.

How much time can you invest?

Opening a franchise is just like opening your own business. It requires a lot of time and commitment to ensure everything runs smoothly. If you are already employed or have other commitments, consider if you’ll have enough time to dedicate to opening your new franchise.

3 Red Flags to Watch Out For When Buying a Franchise

Franchising is a great way to run your own business with a fraction of the risk of starting from scratch. You’ll have access to an existing brand and consumer base, an established supply chain, and more. However, there are times where opening a new franchise is not a good idea. However, if the franchise is consistently losing sales, taking advantage of franchisees, or there are any other noticeable issues, you may want to proceed with caution and consult a franchise lawyer before jumping in. Here are a few red flags to watch out for:

Supplier and Vendors

Some franchises require franchisees to purchase supplies from a single source. While this may be the most efficient and convenient option in some cases, it may also be a red flag. Mandatory suppliers may drive prices up and quality down, which could prevent your new business from reaching its full potential. Consult a franchise lawyer to get an expert opinion on the matter before making a final decision.

How Many Years in Business

Consider how long the franchise has been in business. While it’s possible for newer franchises to succeed, the possibility is much higher for brands that have already been around for decades. Speak with a franchise lawyer to find out what they think about your potential purchase.

Geographic Area

Does the franchise currently have experience in the area you are planning on opening your franchise? For example, the brand may be popular on the west coast, but may not work out on the east coast due to increased competition or other established options that could limit your growth.

Franchise lawyer with franchisee business contract

When Should You Hire a Franchise Lawyer?

Franchises can be an extremely effective way to grow an existing operation. Regardless of the industry, franchising offers a number of benefits to both franchisee and franchisor. Whether it’s an efficient supply chain, established brand identity, or a network of meaningful connections, franchises provide the opportunity to start a new business with a fraction of the risk.

While franchise agreements generally cover important terms and provisions that dictate the relationship between franchisee and franchisor, there are still a handful of issues that may arise. Whether you’re the franchisee or franchisor, franchise lawyers can help make your business relationship both effective and fair, even in the face of controversy. Here’s when you should consider hiring a franchise lawyer:

Before signing your franchise agreement

Franchise agreements provide a framework for how a new franchise will operate, complete with payment details, confidentiality agreements, and more. They are an essential part of any successful franchise, making it important that you understand the terms before you sign. A franchise lawyer can help you decipher the legal jargon to ensure that you understand what you’re getting yourself into.

When there’s a business dispute

If there’s ever an issue between franchisee and franchisor, it’s not advised to try to handle it on your own. Franchise lawyers can help mediate and smooth out any disputes so that all parties are satisfied with the resolution. Regardless of the nature of your dispute, you should consider calling a franchise lawyer before jumping to any conclusions.

Franchise lawyer on retainer

As a franchisee or franchisor, it never hurts to have a franchise lawyer on retainer. Doing so can help you run your business within all legal boundaries to ensure you don’t get yourself into any trouble. Experienced franchise lawyers can also help you streamline your operation, providing a greater potential for growth.

If you’re looking for an expert team of professional lawyers, contact Law Works. They’re one of Canada’s select few boutique law firms with expertise in franchise and business disputes. Law Works represents international and Canadian franchisors, master franchisees, multi-unit franchisees and local single-unit franchisees.

Canadian franchise agreements

Franchise Agreements: Everything You Need To Know

Opening a new franchise is an exciting event for all parties involved. Whether you’re a business owner looking to open a new franchise location or a prospective franchisee, you may be wondering about the legal aspect of this opportunity. Franchise agreements are an essential part of any effective franchise relationship, so here’s everything you need to know.

What is a franchise agreement?

A franchise agreement is a legal contract between franchisee and franchisor that dictates the terms of the relationship. They include things like trademarks, know-how, the structure of franchise, and other important operational details. They also might include various provisions like payment terms, disclosures, confidentiality, obligations of each party, and more.

Why do I need a franchise agreement?

Franchise agreements are an essential part of any successful and healthy relationship between franchisee and franchisor. Without them, either party may be treated unfairly, taking away from potential profits or negatively impacting the franchise as a whole. Having a legal contract that dictates rights, terms, and other provisions ensures that the new franchise will be able to operate smoothly without harming the brand or franchise as a whole.

Who uses franchise agreements?

Anyone and anyone considering opening a new franchise. Regardless if you are a new franchisee or the franchisor opening a new location, it’s important that all parties are protected to ensure that all parties are treated fairly for the duration of the relationship. Even if you have a pre-existing relationship or have discussed the terms in detail, franchise agreements can help prevent issues and solve disputes if one arises.

Franchise Agreement signed in Waterloo

Four Types of Franchise Agreements

Opening a new franchise is an exciting opportunity, but it can also be a bit overwhelming if you don’t have a lot of experience. Whether you’re opening a single store or a new chain, your franchise agreement helps determine the guidelines for the relationship between franchisee and franchisor.

A franchise lawyer can help you understand your franchise agreement, but it’s important to understand what type of agreement you are entering into so that you can choose the right lawyer for the job. If you are considering opening a new franchise, here are the four types of franchise agreements that you may come across:

Single Unit Franchises

Single unit franchise agreements are the most simple and common form of agreement, and the name pretty much says it all. These agreements allow a franchisee to open a single franchise location, and they are a great way to learn about the franchise system before considering additional units.

Multi-Unit Franchises

Multi-unit franchise agreements grant the franchisee permission to open multiple units. They outline the number of units the franchisee is allowed to open over a specific period of time. If franchisee owners have multiple units, there’s a good chance that the franchise organization is stable and doing well.

Area Development Franchises

Area development franchise agreements are similar to multi-unit agreements in that they allow the franchisees to open a specified number of units. The only difference is that this type of agreement limits development to a specific area.

Master Franchise Agreements

Finally, master franchise agreements are just like area development and multi-unit agreements, but with a bit more authority. These agreements allow franchisees to open a specified number of units in a given area, but also give them the power to sell units and usually receives royalties from franchisees.

Before signing a contract agreement, make sure you talk to a professional franchise lawyer. Contact Law Works in Waterloo for expert business and legal advice on all types of franchise agreements.

Franchise Lawyers in Guelph

What Do Franchise Lawyers Do?

Opening a franchise is a great way to gain experience as a business owner, and it comes with less risk than opening your own business. However, there is a lot that goes into opening a franchise, making it important to hire a franchise lawyer, especially if this is your first time. Opening a franchise can be expensive so you might be wary about the cost of a lawyer, and whether or not it is worth it. However, franchise lawyers are essential for any franchisee owner.  Here is what they can do for you:

Review & Advise

Opening a franchise requires a lot of paperwork, contracts, and legal jargon. If you are planning on opening a franchise, it can be a lot of information to digest, especially without the help of a franchise lawyer. Your lawyer will be able to review all documents and contracts, providing you with a better understanding of the relationship you are entering into.

Negotiate Contracts

As we mentioned above, franchising involves a lot of contracts and legal documents that influence the relationship between franchisee and franchisor. A franchise lawyer can help negotiate the terms and contracts so that the agreement is fair and beneficial to both parties involved.

Help with Business Operations

A franchise lawyer can help you determine the best way to operate your franchise once it’s up and running. From legal guidelines to suppliers, they have experience on both sides of the relationship. They can help you determine the most effective and profitable ways to run your business while ensuring that your operation isn’t violating any laws or regulations.

If you’re interested in purchasing a franchise, get the help you deserve. Contact Law Works in Guelph, they can help you solve disputes easily with a team of professional franchise lawyers.  

How Franchise Lawyers Can Help with Franchise Agreements

Opening a franchise can be a fulfilling and exciting opportunity if you play your cards right. Often times, new franchise owners come across a lot of legal jargon and uncertainty in franchise agreements, which can be intimidating or even a bit overwhelming. Your franchise agreement dictates the relationship between franchisee and franchisor, so it’s important to make sure both parties are treated fairly. It never hurts to get some outside help if you are considering a franchise agreement, here are a few reasons why:

They can offer advice on how to choose a business entity

Should your business be a Limited Liability Corporation (LLC)? Maybe it should be a Subchapter S? Or perhaps you should file for a C-Corporation? If you don’t know the difference, you can set yourself up for future complications. It is paramount to choose the right business entity for your new franchise. It determines your legal rights and liabilities as a business owner, and also influences how your business is taxed. A franchise lawyer can offer useful suggestions on how to set up your your new franchise business.

They can help with legal compliance

Franchise lawyers possess relevant knowledge to ensure your franchise agreement complies with local, national, and international law. Whether it’s a small municipal law or a major legal principal, franchise lawyers can help you navigate your franchise agreement to ensure its fair for both parties.

Franchise lawyers keep things simple

Franchising, especially franchise agreements, can be complicated. Experienced franchise lawyers can help you cut through complications by explaining how certain terms or documentation work together, clarify legal boundaries, and negotiate a desirable agreement between franchisee and franchisor. Contact Law Works, Canada’s leading business law firm for professional franchising help. 

franchise business lawyer Ontario.

What To Look For When hiring a Franchise Lawyer

Franchise lawyers can make or break a franchise, since they can influence your franchise agreement and how your business operates. From clarifying legal jargon to helping you navigate legal boundaries or disputes, franchise lawyers are essential for both franchisee and franchisor. With so many lawyers around, it can be tough to find one that works for your situation. To give you a head start, here are three important factors to consider when hiring a franchise lawyer:

Franchisor vs. Franchisee Experience

Most good franchise lawyers have experience on the franchisor side of the equation, so it’s ideal to find someone who meets this criteria even if you are a franchisee. If your franchise lawyer does the majority of their work for franchisees, their approach might be skewed towards the franchisee. Either way, you should ask whether or not they draft franchise disclosure documents (FDDs), because if not, they’re likely unqualified.

Flat Fee vs. Hourly

Many franchise lawyers will work on a flat-fee basis, since they have enough experience to know how long the process takes. Flat rate franchise lawyers can be beneficial since the overall cost is predictable, often allowing for financing over a few months. However, they do have a downside; in some rare cases, it might be more expensive than if you were to pay an hourly rate.

Industry & Business Knowledge

While industry specific knowledge is not always necessary, in some cases the knowledge of relevant regulations can be very helpful. There are some cases/industries where industry specific knowledge is vital; medical franchising, health-care franchising, and dental franchising are a few of many. Try to ensure your franchise lawyer has experience in the industry you are getting into. If you’re looking for professional expertise in the franchise business, contact Law Works for a free consultation.