Franchise
A franchise is a form of business aimed at the commercialization of goods and services according to which, a natural person with a business activity, or a legal person, grants another for a specified time the right to use a trademark or trade name, transmitting the technical knowledge necessary to allow it to operate under uniform commercial and administrative methods.
The franchisor, the franchisees, the franchise network, the consumers: these are the 4 players of the franchise
We have more than 10 years working with this industry, we know it well and we know about its very specific operation, we propose a comprehensive solution for the management of your company, your own and franchised branches, as well as the relationship with your network of clients and franchisees. .. better control equals higher profitability.
The franchisor
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Independent entrepreneur, or corporation.
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Owns a registered brand and/or trademark, the intellectual rights must have a duration at least equal to the duration of the franchise agreement.
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Offers a set of products, services and/or technologies.
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Has successfully developed and operated an original concept in one or more pilot units.
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Provides its franchisees with initial and continuous training that allows them to apply its concept efficiently and following the same standard.
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Ensures the development and sustainability of the concept by dedicating human and financial resources to promoting your brand, research and innovation.
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Is linked to its franchisees by a contract that complies with the standards of the Code of Ethics for Franchises.
The franchisee
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Independent entrepreneur, or corporation, selected by the franchisor.
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Has an entrepreneurial spirit.
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Is responsible for the human and financial resources hired.
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Is responsible to third parties for acts carried out in the operation of the franchise.
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Collaborates loyally in the success of the franchise network and adheres to the principle of homogeneity of this network as defined by the franchisor.
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Rewards the franchisor for the services provided paying monthly royalties and operating fees.
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Adheres to the network and franchise spirit.
The franchise network
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Is composed of the franchisor and its franchisees, all with the same brand, symbol of the identity and reputation of the network.
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The strength of a brand is an element that greatly influences the consumer's act of purchase. This brand guarantees the quality of the products and/or services offered to the consumer. This guarantee is ensured by the transmission and control of respect for know-how and by the provision of a homogeneous range of products, services and/or technologies. The franchisor must monitor the respect of all the elements that make up the brand image by the franchisees, in order to protect the consumer and the franchisees themselves.
The consumer
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A person who purchases products and services for their own use.
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Is the most important player in the franchise, but also the most difficult to pin down. Their consumption habits, linked to their environment and their culture, are different depending on their geographical location. There is no typical consumer. Therefore, the company needs to adapt locally to meet its expectations. The consumer changes rapidly and the company is forced to keep pace with these changes. The customer is changeable and elusive. Buy less and, above all, buy better and look for "something else" in consumption. Better informed, more demanding in his purchases, he favors basic products to better benefit from his favorites. He is more selective, more thoughtful and determines his purchases in a more reasoned way.
Many business models are franchisable
Most operate in the same way according to their activity sector as these brands for example...
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Before franchising
Evaluate the profitability of your business
Before franchising, a business model must first be proven and profitable with one or several operating branches, and a registered trademark, then by reviewing the financial statements of each of these branches, we can determine if the profit generated allows to support an equivalent cost structure, to the income that the franchisor would generate such as royalties, brand promotion fees, local advertising fees, management system usage fees, and purchases of supplies and products... with these revenues, the franchisor must support and accompany every franchisee throughout the term of the franchise agreement.
If franchising is feasible
Define income, operating conditions and legal documents
If the profit of a branch allows to absorb these costs, which represent the income that the franchisor will generate, and leave a reasonable economic profit to the franchisee, then the business model is franchisable. It will be necessary to determine the general conditions of the franchise offer that must include the duration of the franchise contract, the amount of the franchise fee, the initial investment, amounts of royalties and operating fees, supply policies for supplies and products, penalties in case of non-compliance, initial training, and virtual training rules through eLearning, support plans and frequency of visits to the franchisee network, operation manuals ... all these conditions will be specified in the franchise contract, as in all others required documents such as the intention letter, the franchise disclosure document, the franchise agreement, and all the certificates and other documents...
Start the growth of your brand ... Be patient and take care of quality!
Develop the network, control the operation and measure profitability
The success of a franchise network is achieved by having franchisees selected with a good profile, excellent frank and honest communication between both parties, and a control of the operation of each of your franchisees, if the franchisee wins, the franchisor also wins, and their employees too... As advice, it is preferable to grow with well-selected and qualitative franchisees, being good operators, than to accept anyone without taking care of the selection, in the long run it will affect the reputation of your brand.
Interested in franchising your business?
Join us in making your business more profitable and a better place to work.