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Franchising your business is a common decision for many business owners (and an exciting one, too!). So why do businesses decide to franchise?
Franchising is a superb opportunity to enhance your business’s visibility and broaden your market exposure. With multiple branches across various locations, you not only attract more customers but also unlock higher profit-making potential – a trend that continues to strengthen in 2025, with franchised brands enjoying increased consumer trust and market penetration.
There are a number of documents you need to have in place. Since franchising is a significant step for your business, many of the key details and processes must be documented to safeguard your interests should any issues arise. This includes aligning with current legal frameworks and updated best practices, which you can read more about in our Legal Requirements for Starting a Business guide.
One of the key considerations should be a Franchise Grant Process, which plays an essential role in selling your franchise to potential buyers. It enables you to manage enquiries from prospective franchisees efficiently while ensuring every detail aligns with current regulatory and market standards.
In this article, we break down the key elements of a Franchise Grant Process and show how it fits into your overall franchising framework in 2025.
If you’re contemplating franchising your business, it’s crucial to understand how a Franchise Grant Process can work in your favour.
What Is Franchising?
Franchising involves granting another party (the franchisee) the right to operate under your business name by opening a separate branch, while adhering to the standards and systems that make your brand successful.
The franchisee benefits from using your established branding, intellectual property (IP), marketing strategies and internal operational support. This means they step into the venture with many of the essentials—making it considerably easier than starting from scratch.
Typically, the franchisee pays a franchise fee in return for access to these resources, including your operational systems, training programmes, and foundational marketing materials. Occasionally, additional legal costs may be incurred during the negotiation and preparation of the Franchise Agreement, ensuring that all parties are clearly protected.
This Franchise Agreement should comprehensively define the length of your franchise relationship – often referred to as the franchise term. In some instances, franchisees may opt to extend their franchise term by providing at least six months’ notice, at which time you would renew your disclosure document and update the contractual terms as needed.
Following this process, the franchisee will launch a new branch in a different location under your brand’s umbrella.
What Are The Benefits Of Being A Franchisor?
Franchising your business enables you to expand your brand footprint and improve visibility in diverse markets – a key advantage in today’s competitive landscape. As the franchisor, you retain strategic control and benefit from multiple revenue streams through franchise fees and franchise royalties.
By delegating day-to-day operational responsibilities to franchisees, you can focus on long-term growth and strategy. This delegation not only helps maximise your profits but also allows you to invest time in developing new markets and strengthening your competitive edge.
Franchise royalties are a vital source of ongoing revenue, compensating you for the continuous use of your brand, IP, and support systems. They typically cover aspects such as administration, advertising, and technical support – all of which are clearly delineated in your Franchise Agreement.
Moreover, with updated franchising regulations in 2025, franchisors are increasingly encouraged to maintain transparency and regular communication with franchisees. This not only enhances brand reputation but also sets the stage for long-term, sustainable growth. You can explore more about these updated standards in our comprehensive legal guide.
At What Point Should I Look Into Franchising?
If your business is stable and you can demonstrate consistent performance – alongside having a proven market for your model – you might be ready to franchise. Factors to consider include the effectiveness of your current marketing, robust networking channels, financial stability, and solid product demand.
Before embarking on the franchising journey, it is imperative to accurately assess your current business position. Consider the following key elements:
- How will I conduct my marketing activities to attract the right candidates?
- Establishing a robust networking strategy.
- Methods for receiving payments for franchises – perhaps through modern online platforms.
- Managing and covering legal costs effectively.
- Assessing ongoing product demand and future market potential.
If you decide to proceed with franchising your business, our expert lawyers can assist with:
- Drafting a robust Franchise Agreement
- Advising on franchise royalties
- Guidance on franchising-related costs
- Ensuring compliance with the Franchising Code of Conduct
- Preparation and review of your Disclosure Document
- Setting up a tailored Franchise Grant Process
- Advice on extending your franchise term
When you decide to franchise your business, expect a surge of enquiries from prospective franchisees. Managing these effectively is where a well-structured Franchise Grant Process comes into its own.
In recent years, businesses that have embraced digital transformation have found that integrating automated enquiry management systems alongside traditional processes can streamline responses and improve candidate selection. This is an excellent approach for modern franchisors aiming to scale quickly in 2025.
What Is A Franchise Grant Process?
Franchising naturally generates significant interest, with potential buyers keen to learn about fees, location, branding, and ownership specifics. A grant process enables you to manage these enquiries systematically, ensuring you retain complete control over the selection of suitable franchisees.
This process allows you to engage in transparent conversations about key issues, discuss expectations and clarifications, and ultimately determine if the enquiry aligns with your business vision.
By managing these discussions early on, you make it easier to maintain high standards across your franchise network while building trust with prospective franchisees.
What Does A Franchise Grant Process Involve?
While the specifics of the Franchise Grant Process may vary from business to business, generally the process involves three main steps:
- Picking the right franchisee
- Sorting out your franchise documents
- Facilitating the cooling‑off period
Picking The Right Franchisee
The first step is to engage in detailed discussions with potential franchisees, clarifying the nature of the franchise arrangement. The process should begin with identifying the type of candidate you require, filtering enquiries to select those who are financially capable and aligned with your brand vision.
Many franchisors utilise interviews, questionnaires and even pre-assessment forms — tools that are also available in our Building a Team guide — to ensure candidates can successfully maintain and grow one of your branches.
Sorting Out Your Franchise Documents
Once you’ve identified a promising candidate, the subsequent step is to finalise the necessary documentation. It is critical that all key terms are documented, protecting your business and clearly delineating the respective responsibilities of both parties.
Legislation surrounding franchising can be complex and is regularly updated. Therefore, it is vital to have arrangements in writing that are tailored to your business needs – as detailed in our legal guide for business start-ups.
Typically, you’ll need to prepare the following documentation:
- Non‑Disclosure Agreement: Essential during early discussions to protect confidential business details.
- Franchise Agreement: The principal document that outlines the complete details of your arrangement and serves as a reference point for any future amendments.
- Disclosure Document: This document gives prospective franchisees a comprehensive summary of your business, ensuring they can make an informed decision.
Additionally, it is prudent to provide potential franchisees with a copy of the Franchising Code of Conduct, which governs franchising operations in New Zealand.
The Code stipulates the rights and obligations of franchisors and franchisees, as well as the processes to follow during different stages of the relationship – whether buying, selling, or exiting a franchise.
Cooling-Off Periods For Franchisees
Under current New Zealand law, franchisees are afforded a cooling‑off period during which they can reconsider their decision. Should the franchisee choose to exercise this right, they may be eligible for a refund of part or all of their franchise fee, subject to specific conditions outlined in your Franchise Agreement.
How Can I Get A Franchise Grant Process?
Sprintlaw offers a comprehensive Franchise Grant Package, where our expert lawyers work closely with you to establish a process for managing enquiries from prospective franchisees. Recognising that every business is unique, our service is tailored to meet your specific requirements and the dynamic nature of the market in 2025.
- Preparation of all necessary documents for the Franchise Grant Process
- Issuance of the Franchise Grant to the chosen franchisee
- Negotiation and amendment of documents where required
- Issue and finalisation of the official Franchise Grant documents for execution
- Assistance and organisation during the execution of the documents to ensure compliance and precision
Our collaborative approach ensures that your Franchise Grant Process is robust, transparent and fully compliant with the latest franchising regulations. For further details on effective business set-up, please also refer to our Business Set-Up Guide.
Emerging trends: With evolving market conditions and consumer expectations in 2025, many franchisors are incorporating digital tools to streamline enquiry management and candidate assessments. This not only expedites the process but also provides data-driven insights for selecting the most compatible franchisees.
Need Help?
Franchising can be a thrilling next step for your business. To ensure a smooth and compliant launch, it’s wise to consult our friendly lawyers about our fixed‑fee franchising legal packages. For a free, no‑obligations chat about your options and to receive expert guidance tailored to your needs in 2025, contact us on 0800 002 184 or email [email protected].
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