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Franchising your yoga studio – top 3 considerations:

(Before we begin: you most likely need to incorporate your yoga business before becoming a franchisor if you haven’t done so already.)

Legal documents!

The franchise agreement document and disclosure document must comply with stringent regulatory framework, outlined in the Franchising Code of Conduct, and should detail your vision for your franchised business and business model clearly. It is much easier to start off on the right foot (with the correct documents) rather than change the franchise model later on.

The franchise agreement and disclosure statement must be given to the proposed franchisee 14 days before they are expected to sign, along with a copy of the Code.

Consider whether you would you like your franchisee to execute any other legal documents, such as:

• A lease agreement;
• Intellectual property licence agreement;
• Security arrangement;
• Confidentiality agreement; and/or
• Restraint of trade agreement.

An operations manual should also be supplied to the franchisee both for their benefit and to ensure your standards and image are sustained.

How can you encourage success for your franchised business?

You need to standardise the appearance of studios and yoga class experience across franchisees. Your agreement document must efficiently and properly execute how this will be done:

• You may require specific teacher training be completed by owner/studio manager and other certain employees, both on an initial and ongoing basis;
• You may specify the teaching style and that that comprehensive class sequences are to be followed;
• You may detail the customer experience to be provided by the franchisee – level of customer service and the ambiance of studio (climate control, appearance of studio and fit-outs, yoga mat quality, ventilation, the way people pay – through memberships and/or drop in prices, do you serve tea at the end of class? And so on).
• Consider the geographic area where franchisees are wanting to set up and whether it holds a population that will be interested in your style of yoga. Do not allow multiple franchisees to open near each other.
• Look at your yoga business closely and work out what financial expenses your franchisee will need to contribute to

Within your franchisee agreement and disclosure statement, include all of the initial fees payable by franchisee – such as (but not limited to):

• Fee to purchase,
• Signage,
• Training,
• Business licences,
• Rent,
• Fit out (mirrors, flooring, equipment),
• Studio opening marketing costs.

Also provide precise ongoing fees required, for example;

• Contribution to advertising,
• Website fee,
• Software licence fee,
• Insurance,
• Maintenance costs,
• Royalties,
• Cost of any necessary or optional yoga teaching training.

To get in touch with one of our lawyers, you can book a free 15 minute chat here.

This is general advice only. Liability limited by a scheme approved under Professional Standards Legislation. 

Published Mar 14, 2018