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If you own a successful pet care business, you may be considering ways to expand. In this case, starting a pet care franchise may be perfect for you! Although there are many franchise opportunities available, the pet industry is rising. Before you begin, you should first ensure that your business is ready for expansion and that you are ready to undertake some essential steps. This article will outline the steps you need to take to open a pet care franchise and provide some guidance on becoming a franchisor in New Zealand. 

Is Franchising Right for Your Business?

Although franchising may sound like a great idea (and it usually is), you should first evaluate your business to helo you understand whether franchising is the right move. In some cases, your business may be ready for expansion but not quite ready for franchising. Therefore, it is likely you may need to adjust your current business model to align more with a successful franchising model. 

Firstly, you should evaluate your pet shop’s return on investment. You must prove to potential franchisees that your business is profitable and worth franchising. Additionally, when doing so you must factor in franchise fees. Moreover, having a business with high revenues motivates franchisees to replicate your success. Having a stable financial position also allows you to invest in support and training for your franchisees.

Secondly, you should ensure that your business operations manual is easy to follow. If not, franchisees will struggle to implement and manage operations. Further, this could directly impact your franchise’s profitability. Therefore, creating a franchise manual may be beneficial for you. In doing so, you can detail your processes and franchise systems without sacrificing quality. 

Thirdly, before expanding into a franchise, you need to confirm whether you can support your franchisees. Consider whether you have the: 

  • capabilities; 
  • resources; and 
  • time. 

Ultimately, you will need to set your franchisees up for success and may have to provide financial and training assistance. This is especially important for a pet care franchise if you offer grooming services. In addition, pet owners will most likely want a consistent level of service and procedures across your franchises. 

Fourthly, you should ensure you are the legal owner of all intellectual property relevant to your franchise. Doing so will ensure you are protecting your intellectual property when you grant others the right to use it. 

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Developing a Franchise Plan

Your pet shop most likely already has a business plan. However, you may find it helpful to add to your existing plan. You could include why your business is ready for franchising and how your franchise system will work. Furthermore, this can be useful when looking for franchisees and attracting investors. Your franchise plan can include:

  • your business model;
  • training and support systems;
  • management structure;
  • financial forecasts;
  • supply chain;
  • franchise fees and revenue targets for franchisees;
  • skills and qualifications needed from franchisees; and
  • your monitoring process to ensure franchisees are consistent in their work.

Leases

As a franchisor, you will likely be responsible for approving the location of your franchises. In addition, you may need to decide whether or not you will hold the lease. Ultimately, holding the lease will increase your control over your franchises. However, it may also increase your liabilities. In that case, you can transfer the lease between franchisees as you do not need consent from a landlord. It is important to note that you will be responsible for any unpaid rent if your franchisee abandons the franchise. 

Alternatively, you can allow your franchisee to hold the lease or transfer the lease to them. If the franchisee holds the lease, you will likely not have little to no involvement in the landlord and tenant relationship. Furthermore, if the franchise agreement ends, the franchisee can operate a different store outside your branding unless a clause in the lease prevents them. 

Protecting your Intellectual Property (IP)

Your franchise’s most valuable asset is its IP. Your IP can include:

  • trademarks;
  • patents; and
  • copyrights.

You must protect your IP to ensure your pet franchise’s brand is safe. Unfortunately, many franchise owners fail to do this. As a result, they enter into many disputes over their brand ownership. Therefore, you should register your trademarks before franchising. You will have exclusive rights to your logo and its slogans with a registered trademark. Furthermore, you can licence the trademark and brand to your franchisees. 

To apply for trademark registration, you can go to the IPONZ website. 

Preparing Franchise Agreements

As a franchisor, you must prepare a franchise agreement for your franchisees. This agreement outlines the rights and responsibilities of you and your franchisee. You might include the following terms in your agreement:

  • licensing;
  • rights of renewal;
  • grant of rights;
  • franchise fees;
  • dispute resolution;
  • termination;
  • support you will give to the franchisee; and
  • leases and locations.

Key Takeaways

To open a pet care franchise, you first need to consider whether franchising is the right move for your business. If it is, then you can begin to create a pet franchise plan and consider how the leases will operate. Furthermore, you should take steps to protect your IP through trademark registration and a franchise agreement. 

If you need help opening a franchise, you can contact our experienced franchising lawyers to assist as part of our LegalVision membership. You will have unlimited access to lawyers who can answer your questions and draft and review your documents for a low monthly fee. Call us today at 0800 005 570 or visit our membership page

Frequently Asked Questions

What is a franchise agreement?

A franchise agreement governs the relationship between you and your franchisee. It outlines both parties’ rights and obligations to minimise disputes. Moreover, it can include essential issues such as fees and grants of rights. 

Can my franchisee hold the lease?

Yes, your franchisee can hold the lease from day one, or you can transfer the lease to them later on.

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