Buying a Franchise in Ireland: Equipment Ownership Checks

A franchise opportunity may include everything from coffee machines and cleaning equipment to tills and branded display units. However, equipment described as part of the package is not necessarily yours to own. Before buying a franchise in Ireland, establish who owns each essential asset, what gives you the right to use it and who pays when it fails. These checks help you compare offers across the franchise community on a like-for-like basis.

Separate the equipment package from ownership

Ask for an itemised equipment schedule before committing. It should distinguish assets you buy outright from those supplied under hire, lease, hire-purchase or loan arrangements. An item being delivered to your premises does not establish that ownership has passed to you.

For each substantial item, record:

• Its description, specification and whether it is new or used.
• The supplier and legal owner.
• The purchase price or payment arrangement, including VAT treatment.
• When ownership passes, if it passes at all.
• Any separate agreement governing its use.
• Whether installation, testing and essential accessories are included.

If the initial franchise fee includes equipment, ask for the allocation to be explained in writing. Avoid assuming that a single package price buys everything shown in a demonstration outlet.

Where equipment is purchased, ask your solicitor whether the supplier retains ownership until payment is complete. Where it is hired, check whether there is any purchase option rather than assuming that years of payments eventually make it yours.

Calculate the cost of keeping equipment usable

The purchase price is only one part of the commitment. Essential equipment can bring installation charges, servicing requirements, software subscriptions and repair costs. Ask your accountant to compare the full cost of each proposed arrangement over the franchise term, without treating rental payments as equivalent to acquiring an asset.

Request written answers to four practical questions:

1. Who installs and commissions the equipment?
2. Who arranges and pays for routine maintenance?
3. Who bears the cost of faults, accidental damage and replacement?
4. What happens to payments while equipment cannot be used?

Check warranty exclusions and whether repairs must be carried out by an approved technician. If equipment is used, request its age, service history and details of any remaining warranty.

For equipment that is essential to trading, establish whether temporary replacements are available and on what terms. A promise to arrange a repair is not the same as a commitment to supply a replacement machine within an agreed period.

Also identify who must insure the asset and whose interest must be noted on the policy. Ask an insurance adviser whether the proposed cover matches your contractual responsibilities; do not assume the owner's insurance protects your business.

Understand the Irish legal position

In the Republic of Ireland, there is no dedicated franchise statute, statutory franchise-specific disclosure regime or requirement to register franchise agreements. Equipment obligations therefore need careful examination within the franchise agreement and any separate supply or finance documents.

General contract law applies, alongside relevant Irish and EU competition law and other applicable laws. Depending on the arrangement, the Sale of Goods Act 1893, as amended, and the Sale of Goods and Supply of Services Act 1980 may be relevant to equipment purchases or associated services. Ask your solicitor which terms and protections apply to your transaction, including the effect of any exclusions or limitations.

Buying equipment for a franchise is a business transaction. Do not assume that consumer cancellation rights or consumer guarantees apply.

A franchise association's code of conduct is not legislation and does not replace enforceable equipment terms. Likewise, the franchisor's approval of a machine does not itself establish that the franchisor is responsible for its condition or repairs.

Test what happens when arrangements change

Read the equipment documents alongside the franchise agreement. Their obligations may run for different periods, and ending one arrangement may not automatically end another.

Ask whether equipment hire payments continue if you stop operating the franchise. Establish who can collect hired assets, what notice is required and who pays for removal or making good any damage to the premises.

For assets you will own, check whether contractual restrictions affect their later use or disposal. Distinguish physical ownership from permission to use embedded software, branded coverings or other protected material. Owning a till does not necessarily give you a continuing right to use the franchise's till software.

Finally, have your advisers reconcile conflicting documents. Any important concession should be recorded in an appropriate signed document, not left as a sales assurance.

Practical takeaway: Create one equipment schedule showing ownership, payments, maintenance duties and end-of-use arrangements. Resolve gaps before signing, particularly for assets without which the business cannot trade.