Advisory Mar, 30 2010

Teamwork: a route to success

Franchising is a mutually accepted concept between the franchisee and franchisor in building a strong franchise network. Both the parties need to understand their respective roles in order to gain optimum success. Read on to know more

By Ramanjit Kaur
Feature Writer
Teamwork: a route to success

The concept of franchising is based on mutual efforts of both the franchisor and franchisees to establish a successful franchise network. The franchise system involves equal participation of both the parties. This article will give an insight of the various roles and responsibilities of both the franchisor and franchisees in developing a strong franchise system.

The success of the franchise system depends upon the credibility of both the parties. For example, on one hand, it is the franchisor who lays the foundation of a franchising business and on the other hand it is the franchisee who shares the mission and the vision of the franchisor in order to attain high returns. Therefore, both the franchisor and the franchisees are recommended to take time in understanding and implementing the principles of a franchising business in order to ensure proper functioning of the franchise network. Below are enlisted the fundamental elements that the franchisor and the franchisees must consider while entering into a franchise agreement:

Pillars of franchising and their respective roles

The franchisor and the franchisees are the two strong pillars of the franchise network. Therefore, let us have a look at the respective roles of franchisor and the franchisee.

Franchisor: A franchisor is the one who takes the franchise route to establish his successful business. He has a number of roles to fulfill, which includes:

  • Developing the business
  • Marketing business concept
  • Recruiting franchisees
  • Training and guiding the franchisees
  • Creating and maintaining standards
  • Monitoring and motivating the franchisees

Franchisee: Franchisees are the building blocks of the franchise network. The franchisees help the franchisor to expand his business. In other words, franchisees are the route to revenue for the franchisor. They invest their money and other resources in building and operating the franchise business and in return expect assistance from the franchisor’s end in order to facilitate their success.

Rejuvenating franchise network

Once you understand the roles of the franchisor and franchisee, the next step is to consider the rules of building and maintaining a franchise network. The duty of the franchisor is to follow certain rules that will help him in laying the foundation of a successful franchise system. He has to brief his franchisees verbally as well as in writing about:

  • Investment and area required to open the franchised outlet
  • Business concept and its know-how
  • Support, training and back up to operate a proven business model
  • Defined period of franchise agreement
  • Mutual benefits of both the parties

It is the primary step that leaves an impression on the mind of the franchisees regarding the franchisor and how much he cares for his franchisees. It is imperative for the franchisor to gain the confidence of the franchisees since they are the driving force of a franchising business. However, it is not just the job of the franchisor to build and maintain the franchise system; rather the franchisees are expected to put-in an equal amount of effort to ensure the development of the franchise life cycle. This can be done by:

  • Maintaining contact: A franchisor and the franchisees are always advised to stay in touch with each other by regularly communicating regarding the operations of the franchise business.
  • Fulfilling the obligations: Being a part of the franchise system, both the parties are expected to fulfill their already set obligations in order to achieve the desired results.
  • Monitoring the performance: A franchisor is expected to regularly monitor the performance of the franchisees and accordingly suggest them the required remedies to improve the performance. On the other hand, it is the duty of the franchisees to follow those suggestions to enhance their skills and generate profits.
  • Discussing new ideas: A franchisee is advised to discuss new ideas with the franchisor in order to increase the footfalls at his franchised outlet. It is necessary as the franchisor is highly experienced and can help the franchisee by suggesting some wonderful ways of increasing footfalls. Moreover, it will lead to build a strong franchise relation also.

Thus, all the above points if taken care of will lay the foundation of a strong franchise system A franchisee has to realise that the franchisor is not there to do his job and similarly, a franchisor has to understand that the franchisee being new to the business would require all kind of assistance. Thus, when the roles and responsibility of both the parties are dealt well is sure to gain good benefits.

Related: Ask franchisor for best funding options

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