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Franchising can be a rewarding experience, but it is a significant step for your business. Importantly, you’ll need to make sure you have the right legal documents in place to undergo the franchising process.
Here’s what you need to know about franchising in New Zealand and the documents you’ll need in 2025.
Why Should I Franchise?
There are many advantages to franchising—one of the most appealing factors is that it is common for the franchisee to fund and provide the necessary capital. In 2025, this model continues to drive business expansion, allowing you to leverage the resources and entrepreneurial spirit of franchisees while growing your brand.
Franchising allows businesses to scale and grow, helping your brand capture more of your market and create lasting goodwill. Customers will become more familiar with your business and brand name, reinforcing loyalty and trust. This widespread recognition can even strengthen your standing on platforms such as Intellectual Property protection and consumer law compliance.
And, just because you’re delegating day-to-day operations to your franchisee, it doesn’t mean you lose control over the quality and reputation of your business. By establishing clear standards and effective support systems within your Franchise Agreement, you can maintain high standards for your products or services even as you empower other business owners.
What Documents Do I Need To Franchise?
While there are many advantages to franchising, it is also a big commitment, as this area is highly regulated. It is essential to keep abreast of current legislation and guidelines, which have evolved into 2025 with enhanced consumer protections and updated compliance requirements.
In New Zealand, franchises must comply with the Fair Trading Act as well as the Franchise Association of New Zealand (FANZ) Code of Practice. Adhering to these rules and regulations is crucial, as non-compliance can result in significant legal claims from franchisees. It is also advisable to review the latest legal requirements for starting a business to ensure all areas of your franchise’s operations are covered.
There are several key legal documents that you must have in place when franchising your business. These include:
- Franchise Agreement: This is the principal document between the franchisor and the franchisee that finalises the relationship in writing. It details how the franchisee will run the business according to the systems and marketing strategies determined by the franchisor. Typical terms include marketing fees, royalties, training provided, and performance benchmarks. For more insight into the key elements of these agreements, take a look at our Franchise Agreements guide.
- Disclosure Document: This document provides prospective franchisees with all the essential information about the franchise system. It outlines details such as any pending litigation involving the franchisor or directors, cost breakdowns for establishing and maintaining the franchise, contact information for existing franchisees (subject to confidentiality), and termination or renewal procedures.
- Confidentiality and Restraint of Trade Annexure: This helps protect the franchisor’s intellectual property and brand goodwill by preventing franchisees from competing with the franchisor or misusing proprietary information.
- Deed of Prior Representations: This document captures the representations made to the franchisee before entering into the Franchise Agreement. It is particularly useful when third parties, such as agents, have been involved in the recruitment process, ensuring that any pre-contractual representations are clearly documented. This practice helps avoid potential disputes if certain representations fail to materialise.
Additionally, updating your legal documents periodically can mitigate risks and include any changes imposed by new legislative developments. For example, reviews on what constitutes a legally binding contract or updates in privacy policy requirements are advice we regularly offer.
Modern franchising also benefits from technologies that streamline compliance and documentation. Digital solutions, including electronic signatures and secure document management systems, help ensure your franchise agreements are executed and stored securely. This trend is well supported by our electronic contracting services, which are designed to meet the needs of today’s fast-paced business environment.
Franchising Resources
Laws around franchising can be quite complex, and navigating this area requires expert legal guidance. We have a range of resources to assist you at various stages of the franchising process, such as:
- Selling A Franchise
- What To Do At The End Of A Franchise
- Franchise Agreements
- What Fees The Franchisee Has To Pay
- Terminating A Franchise Agreement
- What To Do With A Bad Franchisee
- Franchisees’ Legal Obligations
- What Are Franchising Royalties?
- Franchise Grant Process
Talk To A Lawyer
Having a lawyer to prepare your Franchisor Package is extremely useful as they can guide you through all the basic requirements under New Zealand franchising laws. A legal professional can ensure that all documents—especially your Franchise Agreement—are meticulously drafted to prevent misunderstandings and minimise the risk of disputes.
Taking your business down the franchising path can seem daunting given the regulatory environment, but remember that it also offers tremendous growth opportunities. With the right legal support, you can navigate these complexities with confidence and focus on expanding your brand.
Feel free to get in touch with us at [email protected] or on 0800 002 184 for more information! We’re available anytime for a free, no-obligation consultation.
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