I spend many hours of my day talking with business owners who want to franchise their businesses, and one question comes up again and again: “I can hire an attorney to write the franchise agreement, so why do I need a franchise consultant as well?”
It is a fair question. A qualified franchise attorney is essential when you franchise a business, but the attorney addresses one part of the franchise development process: the legal side. Franchising also involves commercial and operational decisions that have to be made before the legal documents can say anything useful, and that continue long after they are signed. The two roles are different, and in most cases you will need both.
What Does a Franchise Attorney Do?
A franchise attorney is a legal professional. Their role is to translate your agreed commercial franchise structure into appropriate legal documentation, such as the franchise agreement, the disclosure document and any area development agreements, and to give you legal advice on the relationship between you and your franchisees.
A good franchise attorney makes sure your documents meet the applicable legal requirements, clearly define the rights and obligations of both parties and properly deal with your intellectual property, from trade mark registration and licensing to the confidentiality of your operations manual. We cover the IP side in more detail in protecting your brand, trade marks and operations manuals.
An attorney works with what you give them, though. Most attorneys do not have practical experience of running a business, let alone a franchise network, and they cannot design the commercial and operational decisions for you. If that groundwork has not been done, the legal documents will simply record a weak or incomplete model, which is an expensive problem to fix later.
What Does a Franchise Consultant Do?
A franchise consultant helps you build the franchise system that the attorney will then document. You know your business, but you may not yet have the franchise experience to answer the questions every franchise agreement depends on. For example:
- What type of franchise offering should you have? Single units, multiple units, and area or territorial development agreements each have different operational requirements and results. The choice needs to be made before the documents are written.
- What should you charge? The initial franchise fee and ongoing fees need to suit your type of business and the franchise opportunity you are offering.
- How much training will franchisees need? You may know what someone needs to know to run the business, but designing a training programme that equips every new franchisee to succeed is a different skill.
If these questions have not been answered, an attorney is likely to take the answers from agreements previously written in your industry, and those answers may not suit your business or your goals. A franchise consultant works through them with you as part of the wider franchise model, including readiness, fees and royalties, territories, the operations manual, training and the support structure your franchisees will rely on. Our guide to franchising your business in South Africa shows how these pieces fit together.
Franchise Consultant vs Attorney: The Different Roles
In simple terms, the responsibilities divide like this:
| Franchise consultant | Franchise attorney |
|---|---|
| Franchise readiness assessment | Franchise agreement |
| Franchise offering and territory strategy | Disclosure document |
| Fee and royalty structure | Area development agreements |
| Operations manual development | Trade mark and intellectual property legal advice |
| Franchisee training programme | Legal compliance |
| Franchisee recruitment support | Dispute resolution clauses |
| Ongoing network support design | Intellectual property protection |
The Right Order of Engagement
The order matters. The commercial and operational franchise structure should be sufficiently developed before the attorney is asked to turn it into the legal agreement. In practice, a logical sequence looks like this:
- Assess the business and whether franchising is the right strategy for it at this stage.
- Develop the commercial and operational franchise structure: the offering, fees, territories, support, training and operations.
- Provide that structure to a suitably experienced franchise attorney.
- The attorney drafts the appropriate legal documents based on that structure.
When the agreement comes first, business owners can end up paying for documents that record a franchise model nobody has properly designed. The result is often unhappy franchisees, inconsistent operations and a brand that cannot grow the way the franchisor hoped.
What Happens After the Documents Are Signed?
Completing the legal documents is not the end of the process. You still need to know how to market your franchise offering, how to find and select the right franchise candidates, how to conclude agreements with them, how to train your franchisees and what Head Office staff you need to recruit, train and support them. These are operational questions that call for practical franchise experience rather than legal expertise.
A good franchise consultant helps prepare you for these issues, so that you become a successful franchisor rather than simply a business with a signed franchise agreement.
Why the Two Roles Work Together
Neither role replaces the other. The consultant designs the system. The attorney protects it. Together, they create a framework that allows you to meet your objectives while protecting and growing your business.
It can be tempting to cut one of them to save money, but skipping either usually leaves a gap. A well-drafted agreement means little if the franchise model behind it is weak, and a well-designed model needs proper legal documentation to protect it.
If you are preparing to franchise and want the commercial and operational structure in place before your attorney drafts the agreement, see how Franchise Assist helps businesses franchise. Franchise Assist is a specialist franchise consultancy led by Lynn Mendonca, and works alongside your chosen franchise attorney.