The Role of the Franchisor
It is important to understand that not every business should be franchised. It is equally important that, when you decide to become a franchisor, you do so in a way that maximizes the unique character of your business. Successful franchisors are rarely the product of a packaged approach, as each element of your franchise system should be developed in a way that supports your franchisees so that they can deliver consistently to your Brand Promise. MSA's focus on consistent, sustainable replication is what has made us the leading franchise advisory firm and is one of the reasons our clients are able to successfully manage their franchise systems.
Successful franchisors share some common attributes.
- They are motivated to share their experience and know-how with their franchisees.
- They provide their franchisees with the tools needed to operate their businesses to brand standards.
- They are focused on ensuring that each franchisee operates to system standards.
Great franchisors have all made their share of mistakes, and have survived them. It is their hands-on knowledge of the business they are franchising that is of the greatest value to franchisees. Franchisees benefit from the franchisor's proven experience, which hopefully allows franchisees to avoid some of the minefields that plague many start-up businesses.
The franchisor owns the brand and the operating system that they license to their franchisees. The terms of the franchisee's license, contained in the Franchise Agreement, need to be based on a highly structured strategic plan designed for the uniqueness of the franchise system. Only after developing its franchise strategy should a franchisor begin the development of their Franchise Disclosure Document and Franchise Agreement.
Working with qualified franchise lawyers is essential to ensure that your legal agreements provide you and your franchisees with the protection and brand controls required. Equally important to franchisors is that a well-structured franchise offering is more easily marketed to prospective franchisees.
The franchisee invests in the assets of their business and in the right to use the franchisor's expertise, brand name, operating methods, and initial and ongoing support. The franchisor grants the franchisee the right to operate business under the franchise system's trademarks and service marks, and enforces the brand standards of the system.
Great franchisors provide training to new franchisees and their management, and also provide support in the training of the franchisee's staff. Great franchise systems provide their franchisees with a library of operations manuals, field consulting, consumer marketing and other support, and provide each franchisee with the tools needed to operate their businesses to system standards.