We can advise and partner with start up franchisees.  

Franchising has become an established way for new and existing entrepreneurs to run their own business through replicating the successes of established and successful business owners, who have already proven the financial viability of a particular business model.  The individual/company purchasing the franchise, accesses the expertise, intellectual property and know-how of the original business owner who has successfully established the business model and the brand identity. The originator of the business model normally owns the trademark that the business operates under. They sell the rights to their franchisee partners to trade under that trademark, that identifies al aspects of the business model to the franchisee and put in place a programme of continuing and ongoing support for their network of franchisees. 

A franchise is a business arrangement where the owner of a product or service under a recognised tradename agrees for a fee or a combination of fees to allow another person or business to trade under that trademark, using the same products, service and proven business methodologies and trademark and passes the benefit of its know-how and expertise to that person/Company    

The most popular use of the word franchise has arisen from the development of what is called a business format franchise. This is the format of franchising that most of the international franchise accreditation bodies are interested in.  The business Format Franchise is the grant of a licence by one person (the Franchisor or originator of the business model) to another (the Franchisee or the purchaser of the franchise), which entitles the franchisee to trade under the trademark/tradename of the franchisor and make use of an entire package, comprising all of the elements necessary to establish a previously untrained person in the business and to run it with a programme of continual assistance on a predetermined basis.

Dr Martin Mendelsohn 

The EUROPEAN CODE OF ETHICS FOR FRANCHISING is a practical ensemble of essential provisions for the governance of the relations between a franchisor and each of its franchisees, operating together in the framework of the franchise network. The overarching principles of ethics that underline this set of provisions are good faith & fair dealings, which translate as franchisor-franchisee relations based on fairness, transparency and loyalty each of which contribute to founding confidence in the relationship.The principles of the CODE are applicable at all stages of the franchise relationship; pre contractual, contractual and post-contractual stages.The EUROPEAN CODE OF ETHICS FOR FRANCHISING constitutes the franchising industry’s Self-Regulatory Code and is there for all stakeholders in the franchise industry in Europe to look to for guidance on franchising generally.The CODE’s clear and unambiguous principles are not in contradiction with national laws and fundamental rights in the EU with the continuing objective of setting up a more efficient framework for franchising.In particular, the CODE is the foundation stone of the action of the EUROPEAN FRANCHISE FEDERATION’s National Franchise Association Members. Their respective membership rules, accreditation as well as disciplinary schemes must comply with the standards set in the CODE. The CODE, in its entirety, is binding for all EFF Members as well as their respective memberships. The CODE is endorsed by all EFF Member Franchise Associations each of which is committed to its promotion, interpretation and implementation in their own country. Each Association is responsible for ensuring that the Code is publicly available, in particular to all those entering the franchise industryFor access to the full code clear here                 <codeofethicslink>

Advantages in franchising for Franchisors

Accelerated Growth; You grow your network faster given it is the franchisees investment capital that is growing your brand footprint

Faster Market penetration; You can cover other geographical areas, safe in the knowledge that you brand and business reputation are in safe hands with your franchsiees and you have oversight and control over their operational standards they are delivering.Control the delivery; Through your operations manual and the parties obligations set out in the legal agreements, as franchisor and originator of the business mmodel you can exercise control over your franchisees operational standards.Self-Motivated Operators; It is well proven that even the best company operations manager wont mange a business operation quite as tightly as an independent franchisee operating their business albeit to your business model. Reduced Day to Day involvement; You as the franchisor have no responsibility to respource up your franchisees ocations. It is their business and the responsibility lies 100% with them to manage the business in line with the brand expectations.  No direct Legal liability; Franchisees are required t provide indemnities to the franchisor, protecting the franchisors from any claims from customers of their franchisees, unless of course the cause of the customer complaint was down to negligence on behalf of the franchisorHeightened Brand Awareness; The quicker your network grows the more the brand is seen and recognised.  Franchising can fuel that growth and drive brand awareness more than company operationsGenerate Income. MSF & Marketing Fees; Delivering a good franchise programme generates multiple income streams for Franchisors, from the initial franchise fees payable by franchisees to training fees, to the monthly Management Services Fees and monthly marketing contribution fees. Leverage a proven Business Model; With successful franchising you don’t just benefit financially from the financial success of your own proven business model but you can leverage that successful business model to generate additional income streams from franchisees who are accredited with the opportunity to run their own business to your successful business model.Improve COCO operations efficiencies: As mentioned earlier, even the best company managers don’t tend to outperform your best franchisees because of the “owner operator” mentality of the                                                         franchisees. Often the good franchisees will find ways to grow turnover, reduce costs, improve                                         margins in the business model that you didn’t even think existed. They can assist in setting                                            improved KPI’s and performance metrics for the company operations as well as the franchise                                         network.

The Business model need to be proven in its own rights with a successful financial track record of a minimum of 2 years

There needs to be scope for scale for the business model, as it can be expensive to prepare the business model properly for franchising. The business owner embarking on franchising has to satisfy him/herself that there will be a satisfactory return on the investment made on the franchise development borne by the business preparing to franchise.

From a financial perspective there needs to be sufficient gross margin in the business model that enables the Franchisee to make a worthwhile return on their investment when buying a franchise. Likewise, for the business owner franchising the business model, there needs to be sufficient financial return available to him/her to warrant the investment in developing the franchise model in the first place.

The business should be easy to replicate but difficult for competitors to copy.

 The business model should be easy to train others up in. Simple business models and ease of training up new operators delivers a consistency in operational standards that are key to the success of any good franchise.  

 The business ideally should have its own USP (Unique Selling Point) versus its competitors, to facilitate  differentiation from others in the sector. 

 The business model should be as systems driven as possible to facilitate the easy management of the business by the franchisee, the reduction in paperwork and administration and provide the franchisor with remote visibility on both the operational and the financial performance of their network of franchisee partners

Ideally proving the financial success of the standalone business is not enough for to satisfy the ethical standards associated with ethical business format franchising. Prior to rolling out a franchise, new to franchising franchisors should really run a Pilot programme with one or two “Pilot Franchisees” to prove the franchisability of the business model to be franchised. Traditionally this is referred to as the “Pilot Franchise Programme and the programmes run for over one financial period. 

Strong established Brand. While it may not always be the case, especially with newer businesses franchising,  most franchisees are attracted to franchised businesses that already have an established brand identity with the customers in the sector they serve. This means that the franchisee can leverage that brand recognition to drive their turnover and dont have to go to the extensive cost of establishing their own brand. 

The individual/Company franchising their business model should have their brand name and intellectual property protected under a registered trademark. They should have the trademark under registration or enjoy full rights to the trademark before they commence franchising. In essence when a business is involved in franchising, it sells the rights to the franchisees to trade under their Trademark and access their know how and expertise.

There should be a strong training programme developed by the franchisor to train their franchisees up in all aspects of running the business.

There should be a robust programme of continuing and on going support available through the franchisor to support the franchisees in establishing and managing their businesses to the standards required at start up and on an ongoing basis.