Career Opportunities in Franchising – For Law Students
By Aditya Singh,
NALSAR University of Law,
The Growing Importance of Franchising
Growth is life – how true! The Reliance Industries motto has never been more correct. In an era of intense competition, frequent price wars and endless quest for quality, Growth in business has been achieved primarily in two ways – inorganic and organic. While organic growth is through Greenfield expansion, inorganic growth is through Mergers and Acquisitions. However, a third dimension has come into the spotlight in the 21st Century – Growth through Franchising. Thus, Franchising, a form of business by which the owner (franchisor) of a product, service or method obtains distribution through affiliated dealers (franchisees) in return for a fixed fee and share in profits, has come a long way since its conception by Issac Singer in the 1850s, growing into a third route of expansion for corporates around the world.
Careers for Law Students
Franchise law is going to gain prominence in the coming years. This is primarily due to two reasons – the entry of foreign brands into India and the national expansion of native brands. Indeed, any business that is successfully run and high on cash flows is a potential franchise candidate. The legal dynamics of franchising are considerable. Franchise agreements have to deal with multiple issues as they seek to establish win-win legal relationship between a Franchisor and Franchisee. Some of the essential traits of a good franchising lawyer are:
1. Dynamism in Drafting
Thus it is evident that the work of a franchising lawyer will not be limited to the desk. It will be dynamic – involving a considerable amount of travel in order to determine compliance levels by franchisees, understand the local business conditions and how they may affect the nature of the legal relationship between the Franchisor and Franchisee. Indeed, it would be foolish to have the same Standard Form Contract at every time and place. The franchise lawyer will have to be dynamic to sense the feelings, attitudes and customs of a place and prepare his legal strategy accordingly.
2. Effective Negotiation Skills
One of the prime traits of a lawyer, the ability to negotiate will be a major factor in securing a win-win situation between the franchisor and franchisee. A good negotiator is not one who squeezes out the most from the other party – that would lead to damage in the long run. On the contrary, in today’s world, the best negotiators are those who can lead to a mutually agreeable win-win situation between the Franchisor and Franchisee. The importance of this cannot be overstated because Franchising is a long-term business activity. Every franchisor would want the Franchisee to be enthusiastic about the business and not feel as if he got a raw deal.
3. Other Qualities – A Sound Business Sense
Last but not the least, no franchise lawyer can ensconce himself with the cozy domains of specialization. He cannot limit his knowledge only to the legal aspects and leave the rest to the MBAs. He must have a sound understanding of the business of his client – who for the purposes of this article is the Franchisor. A franchise lawyer with knowledge of business will know what are the trade customs. This way he will not constantly harp on petty contractual clauses, which he thinks are important but matter little to the business. Moreover, a sound understanding by the franchise lawyer will help him to appreciate the ‘trust factor’ in business. In a country like India, trust perhaps plays a more important role than the written clauses. While a contractual clause can deter a franchisee from defaulting, only trust can encourage him to drive the business to prosperity, benefitting himself and the Franchisor in the long run.
Thus, it is about time that students in India’s premier law universities consider taking up Franchising as a career option. Anyone who can create a sound business relationship between parties can enter the world of franchising. Moreover, there are numerous organizations such as Franchise India (www.franchiseindia.com), which can assist people interested in this sunrise sector. For further advice, please post comment or write to me.
“Franchise Times Guide to Selecting, Buying & Owning a Franchise” by Julie Bennett
“Street Smart Franchising” by Joe Mathews