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Business Relationships

To increase your business turnover, market share and, most importantly, profits, you might need to consider agency, distribution or franchise agreements. 

Using these methods to grow your business could reap much quicker rewards than relying on organic growth and increased reputation alone.

Oliver & Co Solicitors in Chester can help you understand the key differences between these options and which one will be best for your business. We’ll discuss the advantages of each one and make you fully aware of all their individual benefits.

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Agency Agreements

Many businesses employ agents to sell their products. Agents are individuals who have the legal authority to create relationships between the company, or principal, and its customers that lead to the sale of goods or services.

When engaging agents to promote your company’s goods, it’s vital to have an agency agreement in place. Doing this lays down the terms and conditions of the relationship, and determines levels of commission or fees to be paid, notice periods to be given and any exclusivity rights. All agreements must adhere to the Commercial Agents Regulations 1993, or any disputes may lose you both money and reputation.

At Oliver & Co, we can advise on the best way to proceed with employing agents and draw up a legally binding agency agreement for your business.

What is included in an agency agreement?

Having these written down in a formal agreement clarifies the relationship between you and your agents, and provides strong legal protection if any disputes arise in the future.

Distribution agreements

In the commercial world, a distributor buys goods from a supplier to sell them on to customers. This may be a simple relationship on the surface but it needs to properly governed.

Oliver & Co Solicitors can draw up a distribution agreement that specifies the terms of this business relationship. There are many different types of distribution agreements for businesses, and we’ll tell you which type of agreement suits your business the best, which usually depends on the scale of the distribution and what type of goods are being sold.

Here are the key features of some types of these agreements:

Exclusive distribution agreement

This agreement is perfect for where distributors can only sell products in a specified geographical area. It can also include particular products or sales channels.

Sole distribution agreement

Often a sole distribution agreement works alongside an exclusive distribution agreement as a supplier may only authorise one distributor of its goods in one area.

Selective distribution agreement

Sometimes a supplier may wish to have control over the sales a distributor makes. In these instances, a selective distribution agreement is needed to ensure competition law isn’t infringed.

Every distribution agreement needs to contain all the relevant terms and conditions that relate to the supply of goods, as well as information about the element of exclusivity, any key performance indicators, marketing, proprietary rights, the duration of the agreement, any restrictions in place, and the notice and termination periods.

You may have oral agreements in place with a supplier or distributor. These tend to let you down once any disputes occur. Relationships in business can sour and verbal agreements are difficult to back up in a court case. The only way to ensure your rights are protected is to have a proper, written distribution agreement in place between the two parties.

Franchise agreements

Franchising – or agreeing to your brand or business name being used by someone else – is another great way of growing your business. Today’s high streets are full of successful franchises, like fast-food outlets, McDonald’s and Domino’s Pizza, and coffee chains such as Costa. Franchising a business lets you licence your business model to individuals or companies in particular geographical areas and enables you to increase your profits while maintaining a significant degree of control over your brand.

At Oliver & Co, we’ve helped businesses set up and run franchises across Chester, Cheshire, and the North West areas. Our experienced team of professionals are experts at ensuring you retain the desired level of control over your franchises, and that your goodwill is protected to its full.

We’ve also regularly advised franchisees on the key aspects of any franchise agreements and the licensing aspects associated with the agreement.


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