understanding the legal documents
your local area or will you need to travel to another city or interstate? You should also understand who needs to be trained – is it just you or do you need to pay for other staff to be trained? On an ongoing basis, you should be trained on new products and services. You may also be required to attend further training if the franchisor reasonably determines that you require such training. You are also usually required to attend meetings with the franchisor and also franchisee conferences. The latter is a good way to meet with and learn from your fellow franchisees. You will generally need to pay for your attendance at training, meetings and conferences.
Protection of intellectual property The franchisor will want to protect his/her brand. As such, the franchisor will exert controls over the way you use the brands name and logos. You will need to get the franchisor’s approval of your use of these on signage, marketing material, business cards, invoices etc. You will also need to adopt the franchisor’s colour scheme and if required, wear the designated uniforms. You will not be allowed to make any changes to the name or logos or the way the system is operated. Any changes to the system must be approved by the franchisor.
Approved products and services One of the key requirements of a franchise agreement is that the franchisee must offer, and generally only offer, the products and/or services mandated by the franchisor. In a food franchise, this may mean only selling the approved menu items. In a mortgage broking franchise, this may mean only offering the loan products from the panel lenders.
Approved suppliers You will often also be required to only use approved supplies. These may be supplied by the franchisor or by a third party. In the case of the latter, this may be illegal under trade practices legislation, unless either the franchisor has notified the conduct to the Australian Competition and Consumer Commission (and it has not objected) or the franchisor gives you the right to suggest other suppliers for approval. As the cost of goods is an important element in the success of a business, you should ensure that the goods are competitively priced. 61