Franchising

Issues to be addressed in a Franchising Agreement

Franchisee fee Royalties Quality control Advertising Offerings Equipment Location Operations Reporting Dispute resolution Termination

Franchisee requirements

Proven operating locations A credible Top management team Skilled field support staff to train the franchisee A trade identity which is protected and will enable the franchisee to use the trademark, signage, slogan etc Proprietors operation manual Advertising, marketing, PR and promotion plans Communication system Sufficient capital

Franchisee guidelines
Perform

a self evaluation Investigate the Franchisor Study the industry and competition Study the Uniform Franchise Offering Circular (UFOC) Investigate the Franchisors disclosure Know your legal rights

Franchisor considerations
Business

format Franchise: Franchisor grants the right to the franchisee to operate the business in a prescribed way. Exclusive right to trade Distributorship is also part of franchise

Competitive issues
Franchisor competes to sell franchisee Franchisee competes locally to sell the product or service If Franchisee faces losses then franchisor finds it difficult to sell the Franchisee If Franchisor is facing problem selling the Franchisee this decreases brand value, name recognition, advertising support etc

Elements of Franchise
Product

or service should satisfy a continuing demand Format needs to be simple and mechanical Simple and easy to remember name Accurate site selection Administration should be simple