What are my responsibilities as a franchisor?

Are you planning on growing your business? Does a franchise system sound appealing to you? If so, there are various responsibilities involved in becoming a franchisor that you will need to become aware of before you start engaging prospective franchisees.

There are several advantages to becoming a franchisor. For instance, you become a professional relationships manager. This is an important skill to develop as a good relationship with the franchisee is conducive to a successful franchise overall.

As you’d expect, the bigger your network of franchisees becomes, the more market share you’ll cover. Your goodwill and customer base will grow too, along with your revenue.

Getting the ball rolling can be challenging, especially if you don’t have the necessary legal assistance along the way. Franchise solicitors are absolutely essential to the reviewing, if not the drafting, of the agreements between the parties.

Before you go ahead and take the leap of faith in turning your business into franchise, consider some of the ongoing responsibilities you will have to take on as franchisor. Franchisors will need to have a great understanding of the types of products or services the franchise will need to succeed, and will need to provide ongoing support to the franchisee in relation to the operations of the business.

Have you made the image and system available?

The image refers to the trademarks and other intellectual property of the franchise that will be used in the store and in any marketing activities for promoting the business. In most franchise relationship, it is the franchisor’s responsibility to promote the image of the franchise and to monitor adherence to the use of the image within the franchise network.

The system refers to the operations, procedures, rules and regulations of the franchise. The franchisor must give all the necessary materials to the franchisee so that they can abide by this system.

How is the territory important?

The territory refers to the area within which a franchisee’s business will operate. When you network of franchisees grows this responsibility will become more important. The franchisee is entrusting you to protect their interests in trading exclusively in a particular area. If you decide to open another franchise next door, this may be damaging to both franchisees and, as a result, to the franchise network overall. This would generate needless competition within the same franchise and would not serve either party in the long run.

What is the importance of promotional materials?

As the franchisor, you’ll need to make all the promotional materials accessible by your network of franchisees. This will cover things like flyers, entry forms, banners and giveaways, to name just a few.

This ensures that all franchisees are on the same page and are using the same promotional materials across the network. It’s not only important for synergy amongst the franchisees, but it’s equally important to customers of the business.

Are you managing your products effectively?

As a franchisor, you’ll be responsible for tracking where and when supplies are sent. An efficient system of tracking the produce will guarantee wastage is kept to a minimum.

The standard of your products must be the same for every franchisee in your network. In many ways, the reputation of the franchise depends on the consistency of your products at each franchise. Can you imagine asking for a ‘Big Mac’ burger and being told they don’t have the special sauce? No, of course not, because it would never happen. Mcdonalds understands the importance of consistency and reliability in their franchise system.

 Are you providing ongoing support?

Most franchise agreements require the Franchisor to provide ongoing support to the franchisee. This includes things like technical and operational advice when requested during normal business hours. In fact, part of this responsibility on the part of the franchisor is to oversee the entire operations of the franchise network and to ensure there is compliance with the operational standard and procedures.

If, for example, one franchisee requires legal or financial assistance, it is the responsibility of the franchisor to connect the franchisee with the appropriate professionals.

 Conclusion

There are many responsibilities that a franchisor must take on in their role as relationships manager of the network of franchisees. A franchise solicitor will not only explain the roles of both franchisor and franchisee, they will also ensure your agreement is drafted effectively to account for these important responsibilities. Call LegalVision today on 1300 544 755 to get a free fixed-fee quote to assist you with your franchise agreement.