Franchising can be a quick way to expand globally into new markets without the need for a vast initial capital outlay and set up costs. A typical franchise occurs when the owner of a business (the franchisor) grants a licence to another person or business (the franchisee) to use their business idea often in a specific geographical area. Under the agreement, the franchisee trades under the franchisor's trade mark or trade name, and benefits from the franchisor's help and support. In return, the franchisee usually pays an initial fee to the franchisor and then a percentage of the sales revenue, profits or other defined criteria.

Given the global growth in franchising, control and financial risks are inevitably increased for the franchisor. Franchisors need to be proactive in their compliance programmes to ensure that quality is maintained to protect the brand and minimise revenue leakage.

We work with franchisors in implementing successful compliance programmes globally. This could be through review of the portfolio of franchisees, reporting trend analysis, limited scope on-site reviews at the franchisee or detailed forensic review at high risk franchisees.

The benefits to the franchisor are stronger control over the brand or trademark, increased revenues, reduced ambiguities in the agreement and stronger partnerships going forward.