In our recent franchise workshop for new franchisors, we focused on the key considerations applicable to a new franchise business. To succeed in franchising, each of these initial subjects requires careful analysis from multiple angles before setting off on your franchise expansion journey.  We covered and discussed at length the four pillars of a successful franchise: brand, financial model, know-how transfer and documentation.

Established brand

• To franchise, you need a recognizable and well-established brand that customers know and trust
• The brand should have considerable goodwill and a great reputation.
• The brand needs to be protected through registered trademarks and other intellectual property rights.

Unique business model 

• You need to offer a unique business model that enables the franchisee to benefit from your innovation and success.
• Your financial model should allow both the franchisor and franchisee to make a fair profit. This is the franchise value proposition. Franchising works where there is a win-win partnership.
• Where possible, you should also show evidence of the concept's success in other markets.

Know-how transfer and training

• A franchisor needs to have confidential know-how that is unique, successful, and effective.
• It is best for this knowledge to be relatively easy to impart and teach. The more complex your business, the harder it will be to franchise it successfully. For example, high-end restaurants can be franchised, but you will need to invest significant effort in staff recruitment and the training program. The quick-service restaurant (QSR) concept is the most successful franchise model world-wide because it is based on a low skill set and easy to train methods.
• A well-written franchise manual is at the center of a successful franchise operation. It should clearly set out procedures, guidelines, standards, reporting and audit process for the franchisees to follow to help them succeed.

Right documentation

Franchising is a unique mix of legal and business documentation. No franchise is complete without a detailed framework agreement and franchise manual. Other documents may be needed, such as the prospectus. It is crucial that new franchisors allow sufficient time to create a meaningful suite of franchise documents. The most important ones are:

• Franchise Agreement
• Franchise Manual
• Disclosure Document/Prospectus

In case of any questions please do not hesitate to reach out to us.