Basically, franchising is a plan of action which hopes to extend a business thought and its goodwill by licensing the rights to utilize its trademarks (IP) and brand to an independent entity while additionally giving a working framework and support. There are many advantages to franchising however what is included and is it the correct choice for you?
Why would you franchise your business?
It can be a viable approach to develop your business brand when you don’t have the capital or work force to expand yourself. In like manner, a franchisor can by implication put resources into its business and spread the money related risk, yet share the gains and information of a successful commercial thought.
All things considered franchising can be an exceptionally savvy course to scale up a business, given that you can exhibit that your business is successful and that it can be imitated and effectively managed in various areas.
What makes a good franchise business idea?
You have to demonstrate a proven track record; that the model and brand can be successful in more than one site or geographical region. Obviously a few organizations may flourish in one nation and not another due to financial or social contrasts so you should have the capacity to reproduce the business and profit.
A characteristic of a good franchise thought is something that offers a remarkable selling point. There is probably going to be a few or a considerable measure of rivalry in the commercial space. You will stand yourself in great stead if your franchise gives a new or distinctive item or service, particularly if that special quality can be kept up or surprisingly better, advanced, throughout the years. That ties into the importance of product or service adaptability in that specific trade. Will your thought be adjusted to address the needs of different customers?
I am sure that franchising is right for my business. What next?
So you have a built up business with strong financial support and a strong brand. You have a proven and tested working framework set up which works and can be cloned. Through market surveying you have discovered a region, nation or district which is ideal for your franchise.
Now the time has come to get sorted out and bore down the procedure of precisely how your business works in the state of a written manual as your franchisees should repeat this keeping in mind the end goal to build up their own particular venture.
You will likewise need to arrange financial data or a pack to promote the ethics of why a franchisee ought to put resources into your franchise and not another more settled brand.
You then go into a franchise agreement whereby you permit your IP and give the structure, while securing your reputation with reimbursements, governing terms and observing procedures.
Seek legal advice
You will need to discuss the terms of the franchise and carefully document these in a contract ‘The Master Franchise Agreement’. What will you be offering and for how long? For example, will you permit assignments, do you need an option to purchase back the franchise under certain circumstances and will you be offer any help in sourcing retail space?
It is useful to go through your liabilities and obligations with a specialist franchise solicitor from the outset to avoid the pitfalls that many franchisors encounter.
If you are discussing and providing confidential information such as client information, innovations or new thoughts you ought to ensure that potential franchisees consent to a non-disclosure arrangement which ought to prevent leaks that would harm your business.
Assuming that you claim the IP related with the brand or have the rights to utilize and permit the utilization of them, you ought to talk about it with your specialist on how to safeguard your brand through copyright or trademarks before you set out on this course.
Keep in mind the brand is a vital part of any franchise and its image and reputation must be ensured. On the off chance that you have your IP enrolled in the UK where you work, bear in mind to extend this to Europe or further away from home on the off chance that you will franchise abroad, check the IP is available in that nation and class, before advancing too far.
What makes a good franchisor?
- One who offers a solid brand that is effortlessly identifiable and a readiness to effectively ensure and create it.
- A good franchisor perceives that time and cash are required to guarantee that the working framework stays significant and productive, after all this is basically what the franchisee is “buying” other than the privilege to utilize the brand.
- An understanding that the interests of a franchisor and a franchisee are adjusted. There is no point making life troublesome for a franchisee or promoting an agreement which exclusively serves the interests of the franchisor as this does nothing for the brand and at last little to help a franchisor increase revenue in the long term as the franchisee business is probably going to overlap.
- A major exertion is made to keep investment or purchase in sufficiently low to guarantee that the franchisee business is aggressive
- A steady situation and extensive training and marketing projects to guarantee that franchisees hit the ground running and keep on thriving.
- A careful and specific way to deal with picking their franchisees. It is critical to search out an ideal choice for a franchisee. The franchisee must have faith in the brand. Franchises, similar to organizations and firms regularly have a “culture” related with them. It is vital that a franchisee is the ‘right fit’ and the other way around.
What makes a good franchisee?
- One who shows trust in the framework by loyally adhering to the procedures set out in the manual and a readiness to follow directions.
- Is excited and trusts the brand.
- Aware that individuals purchase from individuals and that identity assumes a major part in winning clients so are straightforward and engaging in the process and development.
- Understands that their staff is their most vital resource and that treating staff suitably makes way to achievements.