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Posts tagged "system"

How Do Franchisors Ensure the Present and Future Success of their Franchise?

Successful franchisors are constantly working to improve the quality of the "product" they are offering to the franchisees. The products and services that are offered, the "system" for how they are to be integrated and offered to the market (the heart of a successful franchise), and the support provided to franchisees are areas where franchisors are constantly working for improvement. Work to develop more competitive and effective sources from your suppliers. Franchisors should constantly analyze each component of their own franchise system, looking for ways to reduce cost, leverage economies of scale and increase the quality and quantity of products offered through the franchise network. They are constantly refining the training process and the systemization of their offering to make it easier for new franchisees to learn, implement and successfully provide the products or services offered under the franchisor's banner.

Being a "Franchisor" is Completely Different than Running a Successful Business

Before you became a franchisor, as a business person you were primarily focused on the well being and growth of your own business. You were focused upon the people working for you, the products and/or services going out the door, and the profits coming in. As a successful franchisor, you will be focused on adding value to your franchisees and the "brand" or "system" you're developing as a franchisor. Your primary task is to recruit, teach, train and support new and existing franchisees - focusing on their business. You will encounter challenges along the way within THEIR businesses, and help them to work through issues of under-capitalization, poor management and employee issues, recruiting and training problems and marketing initiatives. A successful franchisor is constantly improving their own "product", either expanding the product line offered to the franchisees, or improving the system used to implement the franchise strategy or lower costs through a more efficient supply chain. Successful franchisors enjoy the challenge of not only running their own business, but helping others to do so as well.

What Happens If My Franchisor Changes the Franchise System?

Franchisors will change the system of doing business which you purchased, whether it is for style and design changes, or to change the required equipment package, or other required elements of operating the franchise. The question is, how much is too much too soon, and what does the existing franchisee have to do to. There are various options when this happens and depending on the changes,and the cost and why the franchise agreement states, will depend on your options. If the franchise agreement is silent about updates to the franchise system in terms of cost or frequency, then there is always room to negotiate with the franchisor about timing of implementation or reductions in fees to fund the cost of improvements. Franchisors are generally willing to work with a franchisee in order to have the updated system reflected in the network. However if the franchisor will not work with you and the updates are unreasonable in cost, timing of implementation or are not being required of every franchise similarly situation, you have rights in not being forced to expend unreasonable sums in an unreasonable timeframe. If not all similarly situated franchisees are being required to make the updates, this is called selective enforcement and is similar to discrimination. In a nutshell, selective enforcement in this manner is completely improper. I can help you negotiate a workable solution or if necessary negotiate a termination of your franchise agreement.

Do I Need a Trademark to Franchise My Business

In general yes, since the California Franchise definition of a franchise includes payment for your trademark used in connection with your system or in connection with a marketing plan. If you have a name or a logo that you want to be part of the system you are going to license as a franchise then you ultimately need to and should have it trademarked. This affords you the protection of no one defeating YOUR use of the name and your right to license it. Having the federally registered trademark also gives you the right to determine under what conditions you will license (franchise) the name. This is why franchise agreements seem so one sided in favor of the franchisor. That's because it is the franchisor's property, the trademark, that needs to be displayed in accordance with exact specifications and conditions so as to promote the good will of the brand as a whole.

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