For many, the idea of buying a franchise seems like a smart way to secure financial freedom. Franchises offer a tried-and-true business model, a recognised brand, and ongoing support—so what could go wrong? As it turns out, a lot. While franchises offer many advantages, success is far from guaranteed. Some franchisees thrive, while others struggle. The difference often comes down to understanding what you’re getting into and getting the right advice before making that big investment.

Franchises are not a one-size-fits-all solution, and not every franchise system will work for every buyer. That’s why it's crucial to do your research and, more importantly, get professional guidance from those who know the franchise industry well. Let’s break down what you should consider before buying a franchise and why having a specialist solicitor by your side can make all the difference.

1. Things to Consider Before You Buy

Here are some key factors you need to think about when considering a franchise purchase:

1.1 Franchise Agreement Terms: The franchise agreement is essentially the contract that governs your relationship with the franchisor. It will define:

Your rights and obligations: What exactly are you expected to do? And what can you expect in return from the franchisor
Ongoing fees: Most franchises come with ongoing fees, such as royalties or marketing costs. These will impact your profitability.
Support from the franchisor: What kind of training and ongoing assistance will you receive? Do they help with marketing, operations, or problem-solving?
Restraints of trade: Will you face restrictions during or after your franchise period? For example, can you start a competing business?
Territory exclusivity: Does the franchise offer you an exclusive territory, or will you have to compete with other franchisees?

1.2 Lease Terms (If Applicable): If the franchise requires a physical location, like a shop or office, you’ll need to understand the lease terms. Is the lease long enough to match the term of the franchise? Are there any renewal options, or will you be forced to move when the lease ends?

1.3 Employee Considerations: If the franchise you’re buying has existing staff, you’ll have legal responsibilities to consider. Do you need to keep them on? Are there any potential liabilities, such as unpaid entitlements?

1.4 Business Purchase Agreement: If you’re purchasing an existing franchise, you’ll be subject to a business purchase agreement. Make sure you understand the details: are there any debts, warranties, or other liabilities you’ll be taking on?

1.5 Financial Viability: Ultimately, your success will depend on whether the franchise can make money. Engage a franchise specialist accountant to run the numbers and confirm whether:

the franchise generates enough to pay you a reasonable wage?
you recover your investment over the term of the franchise?
there enough profit to justify the risk?

2. Know What You're Really Buying

The goal of any franchisee is to make a profit, but that depends heavily on the terms of the franchise agreement and other legal documents. The agreement is the framework that outlines how the business will operate and what income you can realistically expect. Franchises are unique business models, and without specialist knowledge, it’s easy to overlook key terms that could affect your profitability.

Unfortunately, we often meet franchisees who find themselves struggling because they don’t fully understand what they are committing to. They didn’t get the right advice before signing up, and as a result, their expectations didn’t match reality. The key takeaway is this: you don’t know what you don’t know. That’s where expert advice comes in.

3. The Advantage of Using a Franchise Specialist Solicitor

One of the big advantages of working with a franchise specialist solicitor is that we’re familiar with many different franchise systems. At ASCO Legal, we’ve worked with clients across a wide variety of franchise brands.

We’ve seen firsthand how different franchise models work in practice and can provide you with invaluable insights. Instead of just reviewing the paperwork, we can help you understand the practical implications of the franchise system you’re considering.

4. Don’t Gamble With Your Future Income

Buying a franchise isn’t just about starting a business—it’s about securing your financial future. You’re investing in your ability to generate income for years to come, so it’s essential to approach the decision with care. Rushing into a franchise agreement without understanding all the terms and obligations can lead to financial hardship and stress down the road.

The smart approach is to take your time, do your research, and get the right advice from professionals who specialise in franchising, including lawyers, accountants and business advisors, to give you a full picture of what you’re signing up for.

5. Conclusion

Buying a franchise can be a rewarding investment, but it’s not without risks. To increase your chances of success, you need to do your homework, understand the terms of the deal, and seek expert advice. At ASCO Legal, we’ve helped many franchisees make informed decisions and succeed in their new ventures. Remember, when it comes to securing your financial future, it pays to know exactly what you’re buying.

Behind the Brand: What You Must Know Before Buying a Franchise