Franchising in the U.K.

Franchising In U.K. (United Kingdom)

England-Scotland-Wales

Offering Franchisors International Opportunities for Expansion

The U.K. does not have specific Franchise Laws. The rules to follow are:

You must establish a fixed term – the length of term varies from franchise to franchise and is often related to the level of the initial purchase price and/or the level of fees payable

You must give the franchisee the right to renew the term, which will be subject to certain conditions being met. It will be important to ensure the right to renew is not lost due to any trivial breaches of the agreement. If the franchisor imposes minimum performance targets, consider whether these are appropriate, especially if based on the performance of other franchisees

The franchisee must be awarded a clearly identifiable territory and the rights connected with that territory e.g. is it exclusive and does the franchisor, or other franchisees, have rights to operate in the territory in certain circumstances must be explained in detail.

The franchisee will have the right to use the franchisor’s intellectual property. The franchisor’s name, trademark (brand) and training and a warranty from the franchisor that it is entitled to grant license of such intellectual property

You must provide the franchisee confirmation that you the franchisor has taken appropriate steps to secure its intellectual property to protect the trademark (brand) and will prevent infringement of the franchisee rights to that property.

You as the franchisor will have the obligation to the franchisee to provide adequate training in the operation of the business. You are obligated to assist the franchisee in setting up and opening the business. You will be obligated to assist the franchisee to identify a proper location from which to operate the franchise. You will also be obligated to provide the franchisee with supplies to operate the business or to identify suppliers for equipment and inventory and other necessary products and you must provide ongoing support to the franchisee.

You must give the right to sell the franchise by the franchisee. The franchisee will be subject to certain reasonable conditions prior to the sale of the franchised business

In case of illness the franchisee shall have the right to sell the business without being penalized because of health problems. The franchisee's heirs shall also have the same rights in case of the demise of the franchisee.

All of these items should be spelled out in the Franchise Agreement.