Starting up-packages for franchising is the project that takes the soon to be franchisor, from the decision through to starting the franchise.
This is the most common form of service for us and is therefore carefully crafted to provide the client with the most utility.
The project contains for parts and normally takes 2.5-3 months to complete. The method is based on weekly meetings with the time in between being spent on producing materal and develop one’s position regarding the content. Every concept is unique, but through using this method we secure a well-functioning structure for the work.
- Franchise prospect
- Franchise concept
- Plan for expansion with franchising
- Franchise agreement
The first part of the project Is devoted to:
- Going through and documenting the type of business a franchisee shall run
- Form a view on what should be included in the concept
- Establish a general calculation of capital needs
- Calculate a reasonable development of profitability for a franchisee
Through using this well tested method, we carefully navigate through all parts of the concept so as to leave nothing to chance. The result is a document which tells the reader what It means to be a franchisee in this franchise. The business concept forms the basis for forms of cooperation and franchise agreements.
- Technical equipment
- Place of business
- Interior decoration
- The organisation
- Required competency
- Economic system
- Reporting system
- Capital needs
- Sales concept
- Market planning
The Franchise concept
This part deals with establishing how the cooperation within the chain Is supposed to function. We make a division of labour for the chain. We decide what rights and obligations are due to each party. We formulate how to prepare the franchisee for their establishment to secure their success, in other words, a staring up-program. We decide how to secure the franchisee’s compliance with a set level of quality of their work. A template for the content, that is to say an evolved index in a manual is made. The content of the service, advice and education we offer the franchisee is also decided upon during the course of this work.
Deciding upon levels of fees and payment routines are part of this segment. These are partly affected by how much space is available, but also the above content.
To sign a franchise agreement that serves our purpose, we have to analyse the issues arising from the agreement. Every issue provides distinct possibilities for making mistakes that might have decisive impact on the success of the chain. Cooperation in a franchise chain is greatly dependent on the parties knowing the rules of conduct, and their underlying reasons, from the start. It is important to stand up for the content of the cooperation to a critical evaluator.
The most important purpose with this run-through is that we are forced to decide on how the most important parameters of the cooperation are to look like. My experience and examples of how other chains have done, provides a good guide to the work- However, the most important thing is the actual content of the concept.
- Division of labour- System for cooperation
- Rights and obligations
- Starting up-program
- Basis for manual/handbook
- Methods for quality assurance
- Service and advice
Plan of expansion for franchising
When the content of the local operation has been decided upon, and the manner in which the cooperation shall function is established, we can concentrate on how to launch and expand in the best way. The plan of expansion plays an important part in this context. The development of a franchise chain might be a good investment, but it is no automaton. Careful planning is needed to avoid the potholes.
Here we take decision as to our requirement profile towards franchisees. The way of working towards effective recruiting is gone through. The questions of where, when and on what criteria establishments can take place are decided upon. How should the rights to a market share be composed to provide an advantage to the franchisee, without impeding the expansion? How should calculations and other economic information be presented to the applicants? How to secure good finance of the franchisee? How to arrange the recruitment material to achieve the correct balance? How do we find ambassadors and baits, but lower the risk of creating a minefield within the chain?
Franchise chains that have good conditions for profitability, but still do not grow and become successful, often have one or more of the issues below in common:
- The recruiting yields the wrong franchisees
- The recruitment is to slow because financing franchisees is too difficult
- The franchisor has made mistakes concerning market areas early on.
- The franchisor has the wrong circumstances from the start.
We can minimise the amount of mistakes through thorough analysis of how to tackle the issues and comparisons to how others have gone about it.
- Franchise form
- Types of franchisees
- Requirement profile for franchisees
- Plan of establishment
- Market divison
- Plan for recruitment
- Recruitment material
- Presentation material
Franchise agreements and appendices
As a final step, we work out and formulate the agreement that is to be used between franchisor and franchisee. The agreement can now be arranged so as to cover all areas dealt with in the prospect and concept. We use the latest techniques in franchise agreements to profit from the continuous development within the field. It is important to provide both good protection for the franchisor and good sale ability for the franchise. If vaguely writing, the parties will immediately run into difficulties with governance and expansion. If too harsh, it will be difficult to secure any franchisees at all.
Once it is finished, the quality of agreement shall be controlled by an experienced franchise lawyer. The lawyer then becomes acquainted with the franchise system and can then more easily provide more legal services should they be needed. After the agreement is finished, we train ourselves in explaining and defending its content.
- Franchise agreement
- Confidentiality contract
- Tenancy agreement
- Initial contract