Franchising in NSW

Looking to start or buy into a

Franchise? Your Simple 6 Step Guide

March, 2015

Legal Disclaimer

This presentation is offered for general information

purposes only. It does not constitute specific legal

advice or opinion. You should not act or rely upon any

of the information contained within this seminar

without seeking the advice of a qualified solicitor who

specialises in the particular area of expertise and

jurisdiction that you require.

Presentation Outline

1. Introduction 4

2. Consideration 1: Skills & Knowledge 6

3. Consideration 2: Due Diligence 8

4. Consideration 3: Financial Resources 10

5. Consideration 4: Business Structure 12

6. Consideration 5: Accountancy Advice 15

7. Consideration 6: Legal Advice 17

8. Contact Us 20

Slide #

Introduction

Every year, thousands of Australian business

owners purchase franchising rights from an

existing franchise or start a franchise of their own.

Notwithstanding, buying a franchise can be a good

option when going into

business, the reality is that a

lot of new business ventures,

including franchises, fail.

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Introduction

There are a number of important factors you

should consider before purchasing a franchise.

This presentation provides you with six

considerations to assist you make the decision

about whether to buy into or start up a franchise.

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Consideration 1

Skills & Knowledge

Every business is unique. They operate in their

own geographical and socio-economic area, in

their own particular location (street front or

otherwise), in the prevailing economic conditions

and with prospective customers who also have a

unique set of skills and knowledge.

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Consideration 1

Skills & Knowledge

The question for you is:

“Do I have the necessary

understanding, knowledge and skills to

operate this particular business?"

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Consideration 2

Due Diligence

Assuming I do have the necessary understanding,

knowledge and skills, is this particular franchise

business a viable option.

How long has been operating for?

Has it been operating profitably during the most

recent years?

Is it vulnerable to new players coming into the

market?

Does it have a good and secure client/customer

base?

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Consideration 2

Due Diligence

The question for you is:

“Does this franchise business have a good track record and future?”

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Consideration 3

Financial Resources

During the start-up phase of a franchise business

cash flow is very tight. Managing it is critical.

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Consideration 3

Financial Resources

The question for you is:

“Do I have the necessary funds to see the franchise business through the start-up phase?"

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Consideration 4

Business Structure

There are many business structures that can be

used to operate a franchise business:

as a sole trader;

in partnership;

using a company; or

using a trust.

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Consideration 4

Business Structure

However, the business structure you choose

should be the business structure that is best for

you, your family and your business.

It should consider, at the very least, tax

minimisation, asset protection and the ability to

introduce new "business partners" to the business

if you wish.

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Consideration 4

Business Structures

The question for you is:

“Which business structure do I use?"

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Consideration 5

Accountancy Advice

In our view this is a "no-brainer". You do.

Ideally, you will have had your accountant review

the financials of the business as part of you

undertaking the due diligence, and to advise on

the purchase price.

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Consideration 5

Accountancy Advice

The question for you is:

“Do I engage an Accountant?"

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Consideration 6

Legal Advice

Perhaps not surprising, our view is this is also a

"no-brainer". You do.

Again, ideally this will have been done as part of

the due diligence.

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Consideration 6

Legal Advice

Lawyers are able to advise on the security of

certain business contracts which might be relevant

to the value of the goodwill in the business,

including contracts with suppliers, customers and

in relation to the business premises.

Of course, lawyers are critical to making the

agreements/contracts related to your business,

enforceable.

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Consideration 6

Legal Advice

The question for you is:

“Do I engage a lawyer?"

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Turnbull Hill Lawyers – Contact Us

If you have any further questions about this topic or

you'd like to discuss a related matter, please

contact our Franchising Team today.

We will endeavour to respond to your enquiry

within 24 hours.

Need Business Lawyers in NSW? Call Us

We service all of NSW.

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