Can you franchise your business?
by
Norton Rose
Research studies have, not surprisingly, confirmed that success in franchising, from both the franchisor’s and franchisee’s perspective, is most likely where a successful existing business with an established reputation and goodwill is franchised.
Franchising works best when the franchisor provides a proven and successful business formula to its franchisees. Typically, franchisees will have little prior business experience, and will be reliant on the franchisor to teach them the business fundamentals. Accordingly, in order to replicate a successful business format by franchising, a franchisor must develop a detailed understanding of business and the key determinants of profitability. The franchisor will need to then develop mechanisms to impart the business knowledge of franchisees, such as through initial training, operations manuals and ongoing support and assistance.
Strong and enviable franchise systems are characterised by a number of essential features including:
- A proven concept, product or service with ongoing potential delivered to customers via a proven and successful business format;
- Systems and procedures which can be taught and replicated and which deliver profitability for both franchisor and franchisee;
- A distinctive brand and image, featuring an established and recognised trademark;
- A clear plan fro the development of the network, with sound processes for franchisee recruitment and selection;
- Appropriate personnel to provide the franchisees with the requisite training, support, advice and assistance, and to audit and enforce the system, image, standards, procedures and controls;
- Effective communication systems;
- A relationship structured, negotiated and conducted in good faith; and
- Strong, competent and ethical management.
As franchising techniques have been successfully used in almost every industry, from manufacturing to retail to professional services, there is little doubt that any type of business can be franchised. The key to success is to adhere to the basic principals of franchising, and to tailor make the franchising solution to the particular business.
See the buying a franchise and running a franchise pages for further assistance.
This article was created by Deacons and appears courtesy of Austrade . 26.06.2007
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