Business Sphere

Part III of  How To Create Your Own Franchise Business Series

      If you think your business is franchisable or can be developed into a franchise, then you must create a package to offer it to your prospective franchisees. This franchise package, which is also known as the business format, must include the following:

     1). The brand or image of your business

     2). The operating system

     3). The training and support assistance

     4). The franchise agreement

     1). Brand – As a franchisor you must have a brand or image which will set your business apart from  other similar businesses. Your brand will be the same and uniform for all the places and locations which your franchisees may set up operations.

     Franchisees are paying for the franchise, royalty, and other related fees to you because of your brand, your distinctive image and advantages, without which your business is no different from that of the competitors.

     2). Operating System – As a franchisor you must have a manual of operations which will guide your prospective franchisees in starting their own independent businesses under your network as well as in operating it.

     One basic reason why franchisees would pay you the fees is because you have already the business format which has already proven its capacity to sell the products or provide the services in a profitable manner in an identified market.

     This is one of the most attractive features of franchising- business and management knowhow and technology transfer from the franchisor who is a well-rounded expert in his business to the franchisee who has zero knowledge about the business but who, nevertheless, can jumpstart the enterprise in a very short time, complete with systems and procedures, products and services.

     So, your operating system must include a step-by-step process, from the start when the franchisees choose  the location of their businesses, to finding the target market in their locations, the capital required, number of employees to be hired and their qualifications, It must also have the system for inventory, accounting, personnel and human resources policy manual, product quality control, and everything else needed to run the business smoothly and profitably.

     3). Training And Support Assistance – one of the reasons why franchising has become a popular business format is because of the continuing training assistance and support by the franchisor to the franchisee. This includes product and service development, advertising and promotion, financial and administrative support, quality control, and human resources development. It means that as long as the franchise agreement is in existence the franchisor is always present behind the franchisee, giving all the support necessary to achieve a profitable business.

      4). Franchise Agreement -the franchise agreement is a contract between you, the franchisor, and your franchisees. Being a legal document, the terms and conditions must be clear and understandable to both parties.

     The contract must include the provisions on the amount, manner and frequency of payment of the franchise and royalty fees. In addition, the responsibilities and obligations of the franchisor and franchisee must be spelled out in detail, so that future conflicts and misunderstanding could be avoided.

   This way, the business relationships between you and your franchisees can be harmoniously maintained during the lifetime of franchise and beyond, resulting to your mutual benefit, growth and business profitability.