Franchises & Licences
At YLG, we provide our corporate, franchises and licences clients with excellent legal advice, in a trustworthy manner, while establishing long-lasting client relationships.
We explain the law concerning franchisors, franchisees and corporate clients in an easy to understand fashion when it comes to the various legal and ethical issues that confront our clients’ business operations. We seek to find creative solutions to overcome obstacles that may otherwise hinder finalizing the sale or purchase of a business, or resolving a franchise or corporate dispute.
With franchising, franchisors must satisfy particular legislative requirements. Whether or not your business model is a franchise system depends on several factors:
- Have you granted someone else the right to carry on your business under a strict system or marketing plan that you substantially determine or control?
- Is the business associated with a trade mark or symbol you own?
- Do you require the other person to pay you a range of fees to operate?
- Is there an oral, implied or written agreement?
- If you have answered yes to the above questions, then your business relationship will be a franchise.
Franchises are ideal business structures if you want to be able to have a high level of control over how others operate your business model.
There are also strict requirements under the Franchise Code of Conduct that you must comply with, including providing the potential franchisees with a high level of information about franchising and your business in particular, and acting in good faith when dealing with franchisees before and after they enter into the franchise agreement.
Licensing involves fewer requirements in that unlike franchising, there is no specific legislation setting out how you can and cannot deal with a licensee. Licensing doesn’t have the same level of control, and the licensees determine their marketing system and the way they want to sell the products or services. In this arrangement, you would be licensing your intellectual property – so your business’ branding including trademarks and service requirements. The agreement would explicitly set out the following:
- What intellectual property they would licence from you;
- The fee for using the Intellectual Property;
- The duration for using the Intellectual Property; and
- How services are provided.
Although there is some level of control with licensing, there is no control over marketing, training programs, etc.