Often people consider taking on a franchise (the ‘franchisee’) so that they can benefit from the following key features of the brand that has already been established by the franchisor:

  • The use of a powerful brand for a proven product/ service.
  • The wealth of experience that the franchisor has in the product/service.
  • The support that the franchisor can provide to the franchisee for the marketing of the product and any product/ service development etc.

Franchising is a very good method of growth for some businesses. Some of the key benefits for the franchisor will include:

  • increased service and market penetration for the brand
  • an identical business format following perfected practices/ procedures
  • maximizing usage of existing networks
  • a reduction in the risk of failure for the franchisor
  • a level of control of the franchise business through a franchise agreement
  • income: a royalty fee paid by the franchisee over a fixed term, including a fee based as a percentage of the franchisee’s turnover or margin on product/ service in addition to an initial franchisee fee (outlay fee) for the costs incurred in setting up the franchisee in business
  • further income: the opportunity to make money from providing support and marketing services to franchisees.

To set up a franchise, the franchisor has to put in some hard work in documenting his practices/ procedures. First and foremost the franchisor must consider making the following preparations are in place:

  • have a pilot operation up and running
  • must have manuals, programs for marketing, training, monitoring, control procedures for the day to day running of the business
  • all the above for the finances of the business
  • an attractive package that appeals to others in order for it to be a successful franchise option.

If you are considering a franchise then get in touch with a member of Lawdit’s Commercial Team, who will be happy to help and advise.

share this Article

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Recent Articles