Why deal with a FANZ member?

What difference does it make dealing with Franchise of Association  members?

The Franchise Association of New Zealand (FANZ) was founded in 1996 and is the only body which sets standards for franchising in New Zealand. Members are only accepted after undergoing independent scrutiny to ensure that their documentation and agreements comply with the Association’s rules. These can be downloaded here.

Members must also undertake to abide by the Association’s Franchising Code of Practice and Code of Ethics, which define standards of conduct in keeping with international best practice and include safeguards for buyers.

Dealing with FANZ member franchises

The requirement for franchisors to provide a disclosure document to all prospective franchisees at least 14 days prior to signing a franchise agreement. This must include (in summary):

• A company profile with details of the company and its officers;
• An outline of the franchise, including details of all payments to be made by the franchisee to the franchisor including deposits;
• Disclosure of any commissions payable to advisors or brokers;
• A list of components making up the franchise purchase with details of fees and costs.

See more information on the disclosure document here.

Two other important benefits of dealing with FANZ member franchises are:

1. Franchise buyers are granted a 7-Day ‘cooling off’ period following signing a franchise agreement which gives you the chance to confirm your decision;

2. Every agreement issued by a FANZ member franchise is required to include an alternative dispute resolution provision which allows for faster and cheaper resolution of problems in many instances.

Read the full requirements in sections 8, 9, 14 and 15 of the Code of Practice.

Dealing with FANZ member advisors

Affiliate members of FANZ includes specialist advisors in many areas, including:

• Accountants
• Lawyers
• Bank Managers
• Consultants
• Service Providers

Franchising can be complex so it pays to use specialists who understand the issues and have knowledge of what to look for and how to help you evaluate your own situation. Affiliates are required (in summary) to:

Detail their relevant qualifications, franchising education and experience;

Respect the confidentiality of all information received;

Disclose any personal or financial interests or other material circumstances which may create a conflict;

Read the full requirements in section 12 of the Code of Practice.

The Franchise Association also offers a FREE Franchisee Pre-Entry Training Course for anyone thinking of becoming a franchisee.
This programme consists of 6 short, easy-to-follow modules that can all be completed at your own pace. The course has been designed to help you better understand franchising, your suitability for it and important information and guidance to consider when evaluating the purchase of a franchise opportunity.

To find out more about this online course, click here.

We welcome links from other websites to this article. Please note that this article is copyright © Eden Exchange NZ Holdings Limited, Franchise New Zealand magazine and Franchise New Zealand On Line. While it may be downloaded for personal use, no part may be reproduced on any other website, in electronic or printed form or in any other form whatsoever.