Becoming a Franchisor – Avoid Mistakes
Mark Scott - Director, Franchise Development, NatWest
It is important businesses that are considering becoming a franchisor avoid costly mistakes. New franchisors should take proper advice when changing their business into a replicable business format franchise. It is vital that the potential franchisor makes the most of their resources and does not waste time or money.
NatWest’s Franchise Development Director Mark Scott says, “We advise that all businesses considering becoming a franchise avoid costly mistakes by using only respected BFA advisors. Avoid seeking advice from people or businesses that have simply paid their way to the top of web searches.”
The banks are very supportive of well set up and managed franchise businesses. When the bank reviews the structure of a franchise it looks for strong systems with robust management and advice from a BFA accredited consultant and lawyer.
- Don’t be caught out by results at the top of search engines.
- only use a BFA affiliated adviser.
- It may cost you more in the short term but the long term benefits will outweigh them
To avoid making costly mistakes, businesses becoming a franchisor need to approach the BFA for guidance. Get experienced and knowledgeable advice on how to structure a good franchise.
A referral to a BFA consultant can ensure that the correct structure is in place. They will work with a lawyer and in time introduce the concept to the Banks’ franchise teams. Working with BFA professionals will make becoming a franchisor easier in operations and access to funding for your business and your franchisees.
Tags: franchise a business, Franchise advisor, franchise my, Franchise my business, franchisors, mark scott
Franchisees suffer additional EU VAT burden
Carl Reader, Dennis & Turnbull Ltd
Any UK franchisees or franchisors who supply services to EU based customers will be subject to an additional burden due to changes in the EU’s VAT rules.
Effective from 1 January, the rules state that businesses must declare any services provided to VAT registered customers in the EU. This is effectively an extension to the existing EC Sales List that businesses are required to prepare.
Stephen Alambritis of the Federation of Small Businesses said: “We would urge the government to look at this regulation and make sure that we are not gold-plating the European requirements. In a year that is all about recovery, it is important that we don’t stall it by landing more paperwork on small businesses.”
This could particularly affect franchisors who provide supplies to EU based franchise holders, and as such all affected parties should ensure that they have structured their systems appropriately to facilitate the easy retrieval of this information.
Carl Reader is the head of franchising at franchise accountants Dennis & Turnbull, a leading firm of accountants in the franchise industry.
The above information is provided as general advice and no liability is accepted by the author, Dennis & Turnbull or Select Your Franchise in respect of individuals or businesses acting on the above. Independent advice should be sought in all circumstances.
CCTV for Franchisors?
Geoffrey Sturgess - Partner, Blake Lapthorn Solicitors
The landlord of a London pub was recently informed by the police that his licence application would not be granted unless he installed CCTV on the premises. The landlord considered that this was a restriction on his customers’ civil liberties, and the police backed down when the Information Commissioner intervened in the dispute, claiming that this requirement raised “serious privacy concerns”. Currently the police may only recommend that such conditions be met before a licence is granted. However, new legislation currently being debated by Parliament would give the police the power to impose such licensing conditions, not only for pubs but for shops and off licences as well.
This dispute may be of interest in franchising. Franchisors of pubs may try and include as a condition of their franchise agreement an obligation on franchisees to install CCTV on the business premises. Franchisors currently have no general legal grounds on which to insist that this be done, as CCTV is not a pre-requisite to a licence for alcohol consumption being granted, although it is of course unlikely that franchisees will have the necessary bargaining power to negotiate the terms of their agreement with the franchisor.
Some franchisors are already requiring CCTV, visible at head office, to be installed as a term of the franchise agreement. Whether they could require this as a change in the Operating Manual must be open to question.
Franchisors and franchisees should remember that the primary purpose of CCTV is to record the actions of individuals. As such, its use is likely to be subject to the provisions of the Data Protection Act 1998 (the DPA). The DPA places obligations on organisations that deal with personal data, but also gives individuals the right to know when an organisation holds personal information about them, and the right to claim compensation if they suffer damage as a result. Franchisees need to be aware that if they use CCTV, even where this is at the request of the franchisor, it is their responsibility to make sure they comply with the DPA.
If you would like further information or advice please contact Blake Lapthorn.Information kindly supplied by Geoffrey Sturgess, Partner, Commercial Team, Blake Lapthorn.
