Franchises are becoming more and more popular in New Zealand, especially as the major trading banks become more comfortable with regards to lending against reputable business brands. However, there are a number of pitfalls in regards to franchise agreements that people looking at buying franchise business need to be aware of. Often these problems fall around what the actual expectations of the parties are in terms of entering into these franchise relationships as well as the level of assistance the franchisor is actually required to provide. Franchises should be viewed as a relationship where the behaviour and actions of both parties often have a massive bearing on the business’s success. This is because a franchisor whose franchisee isn’t meeting minimum sales levels will likely be reluctant to provide the full level of assistance their franchise agreement requires, while franchisees who aren’t receiving the proper assistance from franchisors are going to be reluctant to continue to pay franchise fees to their franchisor. It can be a tenuous balance, so the detail of the franchise agreement is the crucial starting point. Prudentia Law can assist you with reviewing any franchise agreement you may be looking at buying into, and we can do this with the view to advising you on what additional protection mechanisms may be useful to include in such agreements.