The legal aspects of buying and owning a franchise inAustraliaare not as simple as buying a car. If only. Still, it’s not exactly rocket science: if you know how.

To buy a franchise, the fist thing you will probably have to do is sign a confidentiality agreement with the franchisor so you don’t go blabbing the Colonel’s 12 secret herbs and spices to all your family and friends.

Next, you will have to enter into a deposit agreement and pay the deposit (possibly non-refundable, so be extra-sure that that pooch-shampooing mobile business is what you really want to get into).

Then, all that’s left to do is find a franchise agreement, read it, understand it and then negotiate the terms with the franchisor. Like taking candy from a diabetic, this is not as easy as we make it sound. So, here’s how the legal agreement thingie works…

Any legal agreement should seek to protect everyone – not just you. It absolutely must cover issues like intellectual property – after all, if you had discovered those 12 secrets spices and seasoning that make even dogs salivate, you would want your share of every two-piece with fries, wouldn’t you?

Getting your franchise legals right is priority number one. The agreement has to reflect the terms agreed between you and the franchisor as accurately as possible. Having said that, don’t forget that most excellent tradition passed down through generations in theMiddle East: haggle, haggle and haggle some more. Negotiating the best deal for yourself is always recommended by the most successful wheelers and dealers.

So as a prospective franchisee, be sure that the agreement says that the franchisor will train you and your staff; will supply you with goods and/or services; is responsible for marketing, advertising and promotions; assists in finding a suitable location for the business and helps you to outfit it; and that they provide management and accounting services.

Of course the franchisor is going to cover his behind legally too. He’s going to want to put in clauses that allow him to keep a sharp eye on your performance, so he can be sure he’s getting the correct royalties. He’s also going to want to protect his franchise from unfair competition. And he’s going to want to keep a handle on how you use the rights to his trademark, goodwill, methods of production, confidential info and his copyright. Anybody who gives you the rights to make money off their genius – because that’s what it is, when you get right down to it – doesn’t want you screwing up their brand. And you don’t want to screw that up either! Remember it’s your brand too.

One of the most important legal aspects of owning a franchise is ensuring that everyone is clear about their rights and obligations. This is because if either of you decide to terminate the agreement for a breach by the other person, or the fixed term of the contract ends and the franchisee decides not to renew; or the franchisee sells the business, the agreement will also be the arbiter of how this is done.

Termination clauses should therefore cover items such as existing customer contracts, so they are transferred smoothly; trademark licences, which will have to be cancelled; the décor of the franchise location will have to changed; and advertising and marketing material, stationary, packaging, operation manuals will all have to be returned to the franchisor. And you must promise not to use copyright material afterwards. These sorts of things are usually covered in what it known as “restrictive covenants” or “non-competition clauses”.

This is pretty much a few pounds of paper in a nutshell. Legally speaking, it’s best you get a lawyer to sort it out for you, but read the fine print.