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Join Date: Aug 2012
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| | Re: Planning to buy a franchise
There are particular legal issues that you need to consider if buying into a franchise (as franchisee). Apart from the legal considerations that apply to any new business, the particular things you will need to consider include:
[I]Complying with the Franchising Code of Conduct[/I
]As a franchisee, you are required by law to comply with the Franchising Code of Conduct. The Code sets out your rights, obligations, what information franchisors must disclose to you, what your franchise agreement must contain, and what procedure you must follow for resolving disputes.
Understanding your tax obligations
You will also need to understand your tax obligations and how franchising payments and fees are treated for tax purposes. You may also need to consider whether there may be Capital Gains Tax (CGT) and Goods and Services Tax (GST) payable when you buy, sell, transfer or terminate a franchise.
Entering a franchising agreement
The franchise agreement is a legally binding document spelling out the rights and responsibilities of both the franchisor and franchisee. Before you sign an agreement you should obtain as much information about the franchise as possible. You should also make sure that all legal aspects are covered in this regard.
Feel free to contact me if you would like further information.
My direct line is (03) 8672 1010.
Your first telephone call or meeting with me is free.