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Franchises in Business

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ARE YOU THINKING OF BUYING A FRANCHISE?

You have to make some real basic decisions.

Are you buying something that will create a better than average income as well as retain its capital value? 

You don't want to pay $200,000 for a business for a $50,000 net profit each year unless you are confident that the business is still worth at least $200,000 and growing, and that the income will not suddenly drop after a couple of years.  Otherwise you are simply throwing money away.

Make sure you are not paying for something that you can create yourself. 

A hard working and energetic entrepeneur could probably establish his or her own gardening business unless the particular franchise came with a vehicle,  substantial tools and a very secure client list.

How much of the purchase price is actual goodwill?  Is that goodwill really worth it?

You have to stand back and ask yourself whether you can establish a like business yourself.

Of course,  some franchises involve the patented intellectual property of someone else.  That is a different matter.  But always ask yourself first - "Am I getting value for money?"

When you buy a franchise you usually buy a business that is part of an existing chain of businesses. 

For example, you might be buying into a small franchise involving a gardening business of a courier brand,  or you may be looking at a far bigger business similar to  K.F.C.  or  Mitre 10.

IF YOU THINK THINGS LOOK O.K.  then . . . . . . . .

You,  the "franchisee",  will have the use of the franchisor’s source’s intellectual property  –  for example,  a trademark or brand name together, with know-how and other ideas – and the chance to sell a reliable product or service.

You will have the support of a franchisor who will already have experienced success in the business and will have advertising resources that would be beyond a sole trader starting up an entirely new business.

In return for this you pay fees to the franchisor.

Typically a franchise has the following elements:

1.  The franchisor grants a right or licence to the franchisee to carry on a particular business under or using a specific name that belongs to or is associated with the franchisor

2.  The franchisee is usually required to operate the business in accordance with the marketing, business or technical plan that the franchisor specifies. In other words, the franchisor is entitled to exercise continuing c

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"Membership No 186685
I have been unable to acquire any case law in regards to bankruptcy. I am thge alleged defendant in the matter and have opposed the application for bankruptcy as I am not the defendant. The case is now at the stage of the high court requiring a synopsis under 251a, I wish to make submissions in not being notified of the hearing at the district court after the notice of proceeding was served. The matter then got judgement without my knowledge and is now before the high court for bankruptcy. Please advise the procedure to locate any supportive case law that may assist with my application to set aside the bankrupcy claim.

Kindest Regards
A.Marsh
I "

"You will certainly get a rehearing if you were not notified but, if you simply misread the documents you were originally served with then you could be in trouble. You must actively follow up on your obligation to file and serve a defence and not just wait for the Court to come to you. Good luck . . . Netlaw "
"Likewise . . . very helpful. Thanks. Gerald - May 2007 - Tauranga"
"Received notice from a creditors lawyer that they wish to put in companiy into liquidation and I have up to today upon receiving their letter. A Statory Demand was intially sent on 7 Aril 2008, which I reponded with a reply explaining that an arrangement (verbal) had been entered in by both parties which was to continue supply, once company got post dated cheques, company stopped surpply and but still continued to present cheques which was not the agreement which was entred into.
What position does that leave me if I want to legal challenge this. Without causing me excessive expresses.

Rina

Netlaw responds: If you say that they cannot properly sue because there was a new agreement for time payment, then you can apply for an injunction saying that the Statutory Demand Notice is wrong. But it will cost you. An injunction should not be done without legal advice. Type up a Statement setting out precisiely all the facts as you know them and see a lawyer as soon as possible. A letter shouid be sent to the other side saying how inappropriate the Demand procedure is when the subsequent agreement between the parties was made and kept by you. But you must get your facts right!"

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"I found this interesting. I want to sue for punitive damages and I was interested to learn that our courts are pretty conservative. I think the Welfare have quite wrongly taken my kids and I have found out that the affidavit they gave to a Judge to get an order to uplift them was known to the Welfare to be incorrect. They told the Judge that I had drug convictions but when I found out 5 months ago that they thought that I proved then to them that this was untrue yet I have now found that they have still put this false evidence in an affidavit. But they have also told other people about my "drug convictions". You have to watch these people. (name witheld) - May 2007"
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"My neighbour had her bag snatched in the main st of Papakura. Her insurance company will pay to get the locks replaced for her house but not for her car. I think this is extremely unfair as her car was not the target for the theft.

We agree . . . Insurances Companies are increasingly relying on small print and NOT saying at the time the insurance is taken out that a car insurance does NOT cover items pinched from inside the car, and, in this case, obviously consider that the car is not similar to the house. It is best to get your Policy and sit down with an Insurance Company Rep. and try and discuss every little thing that could arise for which you would like to have coverage. - Netlaw"

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BOP.

Netlaw replies - Will do."

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