Franchise relationships are rarely life-long commitments; most will be for a fixed term with a right to renew. The renewal process provides an opportunity for both parties to re-assess and recalibrate the relationship, as well as to settle any issues before either renewing their vows or deciding to go their separate ways. This all makes good commercial and legal sense; however, it is surprisingly common that the renewal process is not always followed.
Many franchise systems require franchisees to use specific types of equipment. In order to keep start-up costs to a minimum and enable franchisees to focus their resources on delivering the required products and services, franchisors might make the equipment available under a hire arrangement. However, franchisors must bear in mind that this activity may be regulated by the consumer credit regulatory regime and that the consequences of non-compliance can be severe.