FRANCHISING CORNERSTONES

Before a business makes the decision to grow via franchising, or indeed an individual decides to take the franchising route to self-employment, there are basic cornerstones of the system they need to take into account:

A. Franchise Agreement
This agreement is by its very nature one-sided in favour of the Franchisor. This protects the brand and the investment the franchisee puts into the franchise. The agreement outlines the rights and obligations of both parties and the operational manual is considered a part of the contractual relationship.

B. Boundaries
The franchise systems works on the basis that the franchisor has created the system and the franchisee should not divert from that system. There may also be boundaries incurred that relate to territorial division; product purchases and targeted client markets amongst other things.

C. Independent Business Owners
Franchisees own their franchises and operate as business owners using the name, system, trademark and logos of the Franchisor. The benefit for the Franchisor is that the business will grow exponentially because the franchisees, with their stake in the future, are motivated to succeed. The advantage for the franchisee is a route to entrepreneurship that poses less of a risk than ‘going it alone’; however the franchisee must be clear that the Franchisor still has a say over the way they run their business.

D. Partnership: Franchisee & Franchisor
The key element to the success of a franchise organisation is that it only works as a symbiotic ‘partnership’ with one partner having created a proven, successful business formula and the other partner taking that formula and putting it into operation. Both partners need to respect the value of the other and support each other in the responsibilities that come with their roles in the partnership. One of the Franchisor’s responsibilities is monitoring the quality of the network to protect the brand and the franchisee’s is to comply with the manual and operational standards as set out by the agreement and manual.