Start-up checklist for franchisees

JOINING a franchise system is a popular option for people seeking a career change or trying their hand at running a business. But it is very important that prospective franchisees fully understand their legal rights and obligations before entering into a franchising agreement. The Australian Competition and Consumer Commission recently issued a new publication to assist prospective franchisees make informed decisions about purchasing a franchise. “The ACCC is maintaining a strong focus on fighting fraudulent behaviour in the marketplace and the franchising sector is an area we are targeting”, ACCC commissioner John Martin said. “The main message the ACCC aims to promote is for people who are choosing to join a franchise business to be diligent and make informed decisions before signing on the dotted line. “Buying into a franchise generally involves large sums of money and potentially lifetimes of savings so it makes sense that prospective franchisees have as much information about the business and seek professional advice before making their investment.” The franchisee start-up checklist is designed to help potential franchisees with their investment decision. The checklist is a practical guide to requirements under the Franchising Code of Conduct and important franchising issues such as: •disclosure documentation; •cooling-off periods; and •warning signs to watch out for. By highlighting these issues in an easy reference format, the ACCC aims to alert prospective franchisees about their rights and obligations under the law so they can be better informed about the franchise system they choose to enter and help set realistic goals for their new franchise business.

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