Pret-A-Mangers plans to franchise: how to successfully enter a franchise agreement

Sandwich giant Pret A Manger is planning to slice up its business by opening 100 new outlets with franchisees.

According to reports this weekend, the cafe chain, which is owned by the German fund JAB Holdings, has divided the UK into regions and selected a franchise partner in each.

Their move, which is set to create 2,000 jobs, comes at the same time as a surge in the amount of franchise activity. 

Abby Watson said there are three golden rules to remember: 

'Pret is following a growing trend which is seeing more and more businesses entering into franchise agreements,' she said 'There are three key things to remember in this area.'

'One, if you are entering into an agreement with a company then research the brand and the industry that it operates in. Franchises give you a helping hand, giving you the opportunity to start a business under a recognisable brand with an established customer pool. But you must put in the hard work to make the business grow and you must be prepared to conform to the ‘brand’ and be accountable to the franchisor.'

'Two, always make a business plan – consider your required capital investment, projected cash flow, and breakeven point, taking into account any loans you’ve taken out and repayments you’ll need to make.'

'And third, get expert legal advice on the franchise agreement. This agreement is very important as it sets out all the terms and conditions that you will need to meet and follow, the franchise fee and when the franchise will end – you may need to pay a renewal fee to extend it. Some franchisors may be willing to include a force majeure clause, which changes the franchisee’s obligations in the event of extraordinary circumstances – this would be useful in the case of another pandemic, for example, as if the force majeure clause is invoked, the franchisee may be able to stop paying fees for a certain amount of time. Harper James Solicitors is perfectly placed to advise on providing all the support you need to move forward with confidence.'

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