Business Law and Due Diligence Report

This report examines the legal compliance and due diligence necessary for Domino's Pizza to operate in Australia. It discusses the implications of non-compliance and provides insights into the franchisor-franchisee relationship, highlighting the importance of legal due diligence in mitigating risks associated with franchising. The report serves as a guideline for new entrants in the franchise business, emphasizing the need for awareness of legal requirements and potential consequences.

Running head: BUSINESS LAW AND DUE DILIGENCE
Business Law and Due Diligence
Name of the Student
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Executive Summary:
Franchisor disappointment is persisting and essential as far as cost, broadly and universally. This
report will give a brief idea of the legal compliance that the Domino’s pizza has to meet to
commence its business in Australia. The subject matter will also give the readers an idea about
the legal implications or consequences faced by the similar business enterprise for non-
compliance of the provisions of the legislations of Australia. The report will act as a guideline
for the new entrant of similar business entity. The report shows that what legal provisions a
business entity like Domino’s Pizza is required to comply and should have due diligence about
the legal requirements before entering into the trade. Domino’s has been involved in the business
of franchisee and thus has to be guided by the legislation of Australia. The research in this paper
has been made on the basis of the implications and the consequences faced by Domino’s Pizza
which is one of the leading franchising business enterprises in the world. In Australia,
franchisees remain a hostage, monetarily dedicated counterparty amid bankruptcy and
conceivably convey an awesome money related advantage to the franchisor's creditors. The
article reasons that organization of franchisors does not consider the particular connection
amongst franchisors and their franchisees and gives strategy suggestions to address this issue.

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Table of Contents
Introduction:....................................................................................................................................3
Literature Review:...........................................................................................................................3
Introduction to the Literature:..........................................................................................................4
Review industry best practice models:............................................................................................6
Conceptual model............................................................................................................................7
Methodology:...................................................................................................................................7
Summary:.........................................................................................................................................9
Reference:......................................................................................................................................12

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Introduction:
Domino's Pizza Enterprises Limited (DPE) is the biggest pizza chain in Australia
regarding system store numbers and system deals, and the biggest franchisee for the brand on the
planet. DPE is the select ace establishment for the Domino’s image organizes in Australia.
Over these business sectors, DPE has more than 1900 stores. In May 2005 DPE turned into the
main freely recorded pizza organization in Australia. The primary Domino's store to open in
Australia was in Springwood, Queensland, in 1983, and was the principal pizza producer in
Australia to offer home conveyance. The Australian and New Zealand Master Franchise was
purchased by Silvio's Dial-a-Pizza in 1993 and in 1995 the two brands combined and rebranded
as Domino's Pizza. In February 2017, The Sydney Morning Herald revealed gainfulness issues
with various establishments and that various Dominos stores in Australia had occupied with
across the board underpayment of wages and think underpayment of punishments (Ramaseshan,
Rabbanee & Burford,2017).
Literature Review:
The previous couple of many years of research have focused on the remarkable qualities
of diversifying, for example, legally binding courses of action, the nature of the diversifying
relationship, monetary motivators for diversifying, and extension techniques. Most consideration
has been given to the positive advantages of diversifying to the economy, private venture, and
customers. A few scientists have additionally investigated the negative parts of diversifying,
including diversifying relationship struggle.

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Introduction to the Literature:
A central objective behind the begin and operation of a business attempt is to give a cash
related return to its proprietors. Domino's in the franchisor setting in Australia, this suggests a
landing to its financial specialists. Setting up a business try as a vehicle to fulfill cash related
return is prodded most of the way by a want of a higher rate of return than that achievable by
remaining as an agent. As financial circumstances and achievable quantifiable benefits are not
relentless, the objective of money related return is every so often obliged by the need to get by as
a substance to make a future return. It could thusly be communicated that the inspiration driving
a business wander is first to survive and second to give an entry on input resources of capital and
time that meets the speculators, and the financier's, wants. The twofold purposes of survival and
return have been brought into sharp fixation in the midst of the overall cash related crisis
(Nijmeijer, Fabbricotti & Huijsman, 2014).
In expanding the initiator of the foundation, called the franchisor, and the substance that
recreates the business structure dictated by the franchisor, called the franchisee, have focal
interests that are in a couple of respects alike and in others veer. Both of these honestly confine
substances have a similar reason in surviving and giving an attractive return. Be that as it may
they can't totally have a comparative reason, as their plans of activity are one of a kind, much the
same as the wants of each get-together. This distinction of reason and want is presumably going
to cause weight and mirrors a bit of the perils and challenges that are inborn in expanding and the
franchisor– franchisee relationship. The declaration is drafted by the franchisor's legitimate aides
or specialists and offers no place for course of action of changes by individual franchisees.
Foundation understandings generally canvas parts of the franchisor– franchisee relationship and
will oftentimes give a movement of responsibilities on the franchisee by virtue of the finish of

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the statement by the franchisor or following the demise of the franchisee. The standard sort of
the foundation contract looks good from the franchisor's perspective as consistency of terms (for
possibly a few foundation understandings in a structure) makes ordinary association of the
foundation system more sensible. In any case, the foundation seeing every so often addresses
franchisor disillusionment and its outcomes or gives specific rights to the franchisee on the
franchisor's mistake (Chin-Chiung & Chi-Fang, 2017).
To research establishment disappointment this article creates five essential topics
emerging from a broad examination of surviving writing. To begin with, it takes after the fairly
irregular level headed discussion concerning establishment disappointment from the mid 1970s
to the present by considering the critical investigations that traverse this timeframe. The audit at
that point tends to some major research issues compelling the level headed discussion on
establishment disappointment that are distinguished by a thought of those investigations. We at
that point survey the degree and centrality of establishment inability to decide if it speaks to a
major issue deserving of research or if its significance is more fringe.
Leading a lawful due perseverance is generally the preparatory stride taken by a financial
specialist planning to go into an advantage or offer deal exchange. The reason for a legitimate
due tirelessness is to survey the potential dangers of an exchange by exploring the commitments
and liabilities of the objective organization. This gives objective and dependable data to a
potential buyer regarding whether to continue with the exchange or ring wall, avoid or restrain
the dangers, and arrange guarantees or the price tag.
A buyer ought to dependably guarantee that there is a condition point of reference in the
deal understanding with respect to the fruitful finish of a lawful due persistence as per the

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general inclination of the buyer. This will guarantee that the buyer has a leave opportunity from
the deal understanding if the legitimate due steadiness comes about are not tasteful to the buyer.
A merchant will more often than not expect a non-divulgence consent to be marked by the
potential buyer before the legitimate due ingenuity being attempted.
A legitimate due determination by and large covers an examination of the accompanying
zones: corporate, business contracts, work, protected innovation, data frameworks, ecological,
wellbeing and security, administrative consistence, rivalry, suit, property and assessment. A due
determination ought to likewise give a system to comprehend the purview in which the objective
organization is working.
Where dangers have been distinguished, the vender could give guarantees or repayments
to shield the buyer from any future liabilities which may emerge from these dangers. Where
assents and endorsements are required, to dole out contracts or licenses or in connection to
change of control arrangements or pre-emptive rights, these can be joined as conditions point of
reference in the deal and buy understanding. Besides, where particular issues require activity by
the merchant before the usage of the exchange, these may likewise be included as conditions
point of reference in the deal and buy understanding (Facca, 2013).
Review industry best practice models:
As in front of calendar as 1971 foundation frustrations were noted in the written work,
with 54 fast-food foundations having slumped in the United States (U.S.) in the midst of 1968–
1969, in like manner spelling possible calamity for their various franchisees. This verification by
Ozanne and Hunt seemed to have achieved a calmed response as overwhelming prudent

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discourse on foundation frustration is not obvious in the midst of the 1980s (Croonen et al.,
2016).
Bates assessed survival cases of franchisees as in front of timetable as 1988 and offered
an informed connection of foundation frustration with self-ruling autonomous organization
dissatisfaction in his examination of business news organizations. Bates (1998) was trashing of
the confirmation made in an examination delegated by the International Franchise Association
that declared that 96.9% of foundation units opened in the U.S. in the previous 5 years were still
in operation. He in like manner offer event to feel hesitations about the "standard state of mind"
in a declaration in Business Week magazine that illustrated what a beyond any doubt thing a
foundation was by suggesting that a foundation had a 4 times more conspicuous chance to win
than a free business. From an example of 1,276 foundation new organizations and 19,278 free
business news organizations, Bates found that foundation new organizations showed both higher
rates of discontinuance and lower mean benefit than independent associations.
Conceptual model
Franchisor, yet, as showed for Australia, U.S., UK, and France, not all franchisors win in
business. For franchisors, as they doubtlessly depend energetically on franchisees as a
social event for the continued with achievement of their business, the takeoff of a
singular franchisee is an about minor adversity. In case a franchisee defaults, franchisors
will much of the time have an opportunity to buy back the franchisee's business, along
these lines fundamentally directing their incidents. Liquidation is as often as possible an
open entryway for a lamented association to deal with its operational or cash related

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issues and create as a more appropriate association. The interrelated thought of the
franchisor and franchisee's business together with the case of lawfully restricting
associations that bind the foundation organize are qualities that advance toward getting to
be weaknesses for franchisees if a franchisor crashes and burns. The standard kind of the
foundation declaration limits the limit of the franchisee to self-guarantee and obligation
order, in nearness some time before broadening wound up obviously common, revealed
the full level of the franchisees' vulnerability (Flikkema, De Man and Castaldi,2014).
Correct affirmation shows that a shockingly tremendous number of franchisors do miss
the mark and that their franchisees may encounter the evil impacts of such disillusionment, in
spite of the nearness of the as of now said courses of action. Neither franchisees nor inescapable
franchisees will have the ability to respond to a franchisor's moving toward frustration if they
don't approach reliable and remarkable information on the franchisor's state of dissolvability.
Early notice of the money related difficulties of the franchisor may be essential to the limit of the
franchisees to deal with and orchestrate a convincing technique to deal with a pending
liquidation. In re Country Style Food Services Inc (2002 O.J. No. 1377), Madam Justice
Feldman of the Court of Appeal for Ontario, on an application for leave to propel a court
orchestrate certifying a recommendation under the Companies' Creditors Arrangement Act
(CCAA), created and expressed that the franchisees as a social affair were not thought to be
people to be definitively given and fused into the CCAA technique. In spite of the fact that the
strategy under the Act considers the venture and confirmation of leasers, the borrower
association and conceivably the financial specialists, in circumstances where the obligated
individual association is a franchisor, the franchisees may have an eagerness for a complete
structure of the foundation operation as proposed by the Plan system. It may thusly be legitimate

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where a franchisor searches for CCAA security, to consider whether the franchisees ought to be
hauled out of the methodology and the opportunity to request the ability to share on a fitting
reason.
Persistent due relentlessness can be seen as a wary system to energize the recognizing
confirmation, as in front of calendar as could be permitted, of a franchisor's poor trading or
budgetary inconvenience. These advancing wary procedures will increase in number and
influence as the cash related and trading condition of the franchisor apparently decays.
Methodology:
In any case, we recorded franchisors that had self-perceived as inside the accomplice of
1,025 franchisors (62,000 franchisees) in the Franchising Australia 2010 audit On completing the
data gathering we found a further once-over of 55 franchisors that had declined to share in the
2010 diagram. These confined our partner test. Notwithstanding the way that these were
consolidated into the amount of 1,025 franchisors existing in Australia in 2010, they were barred
in our basic illustration. We thusly investigated the assistant test to recognize if there were
further potential franchisors that had entered association in that summary. One of the failed
franchisors (i.e., Strathfield) appeared in the two records (Facca, 2013).
Second, we attempted to perceive the individual regulators dealing with the association of
the example franchisors with the motivation behind getting their contact purposes important to
lead a survey about their contribution in association with the franchisor's association. Franchisors
are perceived by their trading name in the 2010 and 2012 examinations (Makhubele, 2014).
The identity of the authentic trading component is not gotten. Where we could discover
the substance name, we collected these franchisors according to their current legal and cash

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related status– whether they had quit trading, entered association, wind up doubtlessly obliged
without entering association, or were never again broadening.
We couldn't affirm the real substance for franchisors in the example. A further 14
franchisors had been deregistered without appointing an official. That is, the investigation
recognized that some franchisors quit trading without going into association. (This may be by
organize liquidation.) In these cases, it is not clear what the destiny of their franchisees was.
Therefore, they legitimize future examination (Degerth and Hultman, 2014).
We by then called the perceived supervisors. From time to time we made two calls
beforehand we connected with some individual who agreed to take a message or complete the
review. In two cases the vital official had left the firm and no one felt prepared to answer the
examination. In few cases no one tended to the phone. Fifteen chiefs at first agreed to answer the
examination and one of them in this way declined. Eight responded and this case gauge licenses
us to make just extraordinarily restrictive conclusions
Summary:
The points of confinement between the corporate scattering model of the franchisor and
the little (free) plan of activity of the franchisee. The impact of franchisor dissatisfaction on
franchisees remains under investigated. Given that solitary two of the conveyances suggested in
the Appendix reflect cross-disciplinary research and only an unobtrusive number are cross-
jurisdictional, we recommend that it is helpful for properly sponsored multidisciplinary and
cross-jurisdictional research to be driven in the field of franchisor frustration. Both the insightful
gathering and industry individuals will benefit by a more careful perception of the complexities
and nuances of franchisor frustration.

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This written work review and speculation drives us to a clearer cognizance of the
potential issues for franchisees rising up out of franchisor frustration and moreover giving
encounters into franchisee dissatisfaction. It outlines view for our substantive research in
Australia that is set out next.

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Reference:
Nijmeijer, K. J., Fabbricotti, I. N., & Huijsman, R. (2014). Making franchising work: A
framework based on a systematic review. International Journal of Management
Reviews, 16(1), 62-83.
‘Croonen, E. P., Brand, M. J., & Huizingh, E. K. (2016). To be entrepreneurial, or not to be
entrepreneurial? Explaining differences in franchisee entrepreneurial behavior within a
franchise system. International Entrepreneurship and Management Journal, 12(2), 531-
553.
Chin-Chiung, K. U. O., & Chi-Fang, L. I. U. (2017). A Review of Franchising Research in
Taiwan Social Science Citation Index (TSSCI) Database. Journal of Economics
Library, 4(2), 227-237.
Ramaseshan, B., Rabbanee, F. K., & Burford, O. (2017). Combined effects of franchise
management strategies and employee service performance on customer loyalty: a
multilevel perspective. Journal of Strategic Marketing, 1-19.
Flikkema, M., De Man, A. P., & Castaldi, C. (2014). Are trademark counts a valid indicator of
innovation? Results of an in-depth study of new benelux trademarks filed by
SMEs. Industry and Innovation, 21(4), 310-331.
Facca, T. M. (2013). Using discriminant analysis to classify satisfaction data to facilitate
planning in a franchise context. Journal of Strategic Marketing, 21(2), 125-139.

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Shockley, J., & Turner, T. (2016). A relational performance model for developing innovation
and long-term orientation in retail franchise organizations. Journal of Retailing and
Consumer Services, 32, 175-188.
Makhubele, N. T. (2014). Effects of opportunistic orientations and opportunistic actions on
franchise systems (Doctoral dissertation).
Degerth, J., & Hultman, A. (2014). Förtroende och efterlevnad: Om franchisetagares upplevelser
av franchiserelationen.
Kacker, M., Dant, R. P., Emerson, J., & Coughlan, A. T. (2016). How Firm Strategies Impact
Size of Partner‐Based Retail Networks: Evidence From Franchising. Journal of Small
Business Management, 54(2), 506-531.
Chiou, J. S., & Droge, C. (2015). The effects of standardization and trust on franchisee's
performance and satisfaction: a study on franchise systems in the growth stage. Journal
of Small Business Management, 53(1), 129-144.
Weaven, S. K., Grace, D. A., Frazer, L., & Giddings, J. (2014). Processual antecedents of
perceived channel conflict in franchising. Journal of Business Economics and
Management, 15(2), 316-334.