The guide of the franchising :
Definitions of the franchising :
• The Franchising
The franchising is a system of commercialization of products, of services or of technologies, based on a close and continuous collaboration between companies legally and financially distinct and independent, which are the Franchisor and the Franchisees.
• The Franchisor
The Franchisor gives to his Franchisees the right to exploit a company in conformity with the concept of the Franchisor and imposes the obligation to respect its standards. The Franchisor has a tested and proven know-how which has allowed him succeeding on the market. Its target is often to develop more quickly than before the network, the thing that he cannot do alone.
• The Franchisee
The Franchisee can, in return for a direct or indirect financial contribution, use the label and/or the brand, the know-how, the commercial and technical methods, the procedures etc. The Franchisee is therefore the leader of the company who wants to be surrounded by competences and refuses the unplanned adventure. The Franchisor continuously brings a commercial and/or technical, within a written contract of franchising.
• In other terms, the Franchising is :
A company’s strategy
a) where the franchisor develops a network
b) starting from its success, from its concept and from its know-how
c) increasing the profitability of its costs
d) through a partnership with independents, the franchisees
e) the franchisees can in this way reiterate a success
f) and benefit from the help of the franchisor to achieve it
This company’s strategy requires :
a) A transfer of know-how from the franchisor to the Franchisee
b) roles which are divided between the franchisees and the franchisor
c) the constant efficiency of the franchisor in his assistance to the franchisee
d) the respect of the franchisee for standards relative to the label
e) the respect of everyone to the promise made to the consumer by the label
f) a balanced allocation of the profits
g) a good balance between the independence of the parties and the homogeneity of the network
How to classify the franchises?
There is 100 ways to classify the franchises.
We have chosen the most used ones.
• Franchise of distribution :
Sell products manufactured or chosen by the Franchisor.
Ex : Manoukian, Spar
• Franchise of services :
Sell services conceived by the Franchisor.
Ex : Cartridge World, Novotel , De Winter Group
• Industrial Franchise :
Produce according the know-how of the Franchisor.
Ex : Coca Cola, Chambourcy
Why to become a franchisee?
- The commercial and technical collaboration is a necessity for the independents to face the power of the big brand chains groups.
- The success is a result of the association of the « know-how » and the concept of the franchisor with « the entrepreneurial spirit» of the franchisee.
- The structures and the means to implement are simpler and more economical than in the brand chain sector because a goof franchisee is motivated and does not need to be "pushed".
- It is a quick and evolutionary system to cover a market because investments and competences are shared.
- A network offers obvious benefits for the homogeneity, the purchasing power, the advertising power, the means…
- The development is less expensive than in brands chain because the investment is divided between the Franchisor and the Franchisees.
- The development is faster.
The partnership between the independent entrepreneurs who are the franchisees and the franchisors is efficient because well selected franchisees are more motivated, invest more time and manage closer than employees.
• Advantages for the Franchisee
- A network offers obvious benefits for the homogeneity, the purchasing power, the advertising power, the means…
- He is the owner of his company and autonomous alone.
- He copies a success by being assisted which generates a more quickly and less costly start.
- He limits his risk: same reasons.
- The % of entrepreneurs who make the invested capitals profitable is higher.
He acquires a superior professional master thanks to the transfer of the know-how and to the assistance.
He learns a new profession.
- Apply the commercial strategy of the franchisor. The real decision maker is the client. The concept has been conceived by the franchisor to seduce him and thus to be respected.
From this principle very obvious other requirements arise :
- Respect of the standards.
- Obligation to follow the evolution of the concept and of the know-how
- Obligation to supply himself with the referenced products from the referenced suppliers
- Respect of the financial obligations (Right of entrance, royalties …)
- Respect of the obligations provided in the contract
The Franchisee copies a concept which does not belong to him. He should thus respect it. But it is important that he could give his point of view and the good networks are the most that generate observations, critics and ideas of their franchisees. Very often, they organize commissions or find other means to make the franchisees participate to the evolution of the network.
• Role and contributions of the franchisee before the opening
- Research and negotiation of the location
- Contributions of equity and guarantees
- Banking negotiation
- Arrangements of the sales point
- Participation to the training
- Recruitment and training of the staff
- Constitution of the company and administrative procedures
• Role and contributions of the franchisee for the opening
- Opening of the sales point
- Launch advertising
- Implementation of the concept
• Role and contributions of the franchisee after the opening
- Participation to the programs of permanent training
- Participation to the advertising actions
- Participation to the meetings, seminars, commissions,…
- Management of the self-sufficient company
- Respect of the right of access of the Franchisor
- Send the information to a higher level
- Respect of the financial and contractual commitments
- Local defense of the label
• Role and contributions of the franchisor before the opening
« Throw the bases of the success »
- Assistance in the research and the negotiation of the location
- Assistance for the realization of the study of feasibility and the banking negotiation
- Assistance for the arrangement of the sales point
- Training of the franchisee (and of the staff)
- Guide for certain administrative procedures
• Role and contributions of the franchisee for the opening
- Delivery and installation stocks.
- Delivery and installation furniture and equipment.
- Launch advertisement.
- Opening Assistance.
• Role and contributions of the franchisee after the opening
- Permanent training.
- Advertising plans and marketing actions
- Meetings, seminars, commissions …
- Periodic visits (Control, Animation, Assistance.)
- Helpdesk
- Organization of the transfer and of the treatment of the information in both directions
- Respect of the financial and contractual commitments
- Brand defense
Hardly surprisingly, if the Franchisor accepts that the Franchisee does like him, it is because he finds in it, a financial interest.
• Entrance fee
It’s the counterparty of the investments done by the franchisor to create, test the concept and make the franchisee benefit from it. The cost of the training and the assistance of departure can be included or invoiced separately
• Sign royalty
Counterparty to use a sign, a brand. Often a % on the turnover but it can be also a fixed amount.
• Service royalty
This % or this flat fee compensates the various services that the Franchisor offers to the Franchisee, assistance, training, purchasing office... often included in the sign royalty. We also talk about royalties or « running fees » or « on going fees ».
• Royalty or redevance
It’s frequent that the sign royalty and the services royalty are regrouped in a unique section not detailed: Royalty or redevance.
• Advertising fee
The addition of these % or flat fees of all the franchisees allows having bigger means and taking more performing and better negotiated actions, more efficient thus to develop the business of every member.
• Margin on the purchases :
Certain franchisors are manufacturers or suppliers of products that the sell to the franchisees. They have therefore a margin.
• RFA and back margins :
If the franchisor is a purchase office or a reference office, the suppliers pay sometimes discounts of the year end or commissions that allow reducing the royalties. It is desirable to make the franchisees know this and it is even compulsory in certain countries.
McDonald's :
Recipes but also an organization, management, security.
Ixina :
Precise standards to sell kitchens on a controversial market.
Pizza Hut :
Des check-lists which are very complete for the quality, the hygiene and the profitability.
• Why to create standards ?
- The know-how allows creating standards and procedures that allow saving time and avoiding errors.
- The consumer wants that the item presented in the ad is the same provided, and this has to be in the entire network. It is the condition to construct a strong brand image, thus homogeneous.
- Control of the quality, of the hygiene…
- Facilitating and making the training profitable.
- Enhancing the productivity.
- Economies of scale for the standardization.
How to choose his/her franchising?
Before thinking which is the sign done for you, you should identify your competence profile because the results that you want to obtain will not be achieved unless you are adapted to the Franchising in which you are entering.
The, a good Franchising, it is firstly a Franchise that you like, in which you would enjoy working, for which you have the required assets and for which you have trained yourself with the assistance of the Franchisor.
Don’t look for the perfect Franchising in where everything is easy and where you do not have to work. Either, it does not exist, or everyone will pounce on this market and saturate it at the expense of the market share of each one.
There are good markets, good networks, but we it is essential firstly to find a good Franchisee, motivated and trained.
The perfect franchising does not exist!.....or more exactly, is different for each one of us.
THE PLUS OF YOUR FUTURE PARTNER:
- The concept: manufacturing, commercialization, communication, management
- Commercial policy, position on the market
- The mastering of the activity by the franchisor
- Quality and organization of the training
- The assistance
- The profitability
- The contract of franchising, balanced between the franchisor / franchisee
PROFITABILITY OF THE FRANCHISOR
- Where and how the franchisor earns his money
- What is the interest of the franchisor from the success of his franchisees
THE FRANCHISOR BRINGS AS BENEFITS :
- A knowledge of the profession
- Training in the implementation and the exploitation
- Evolution of the concept and research development
- A faster launch
- Mutualization of the operating and the management costs
- Profitability of the investment
Before the opening :
- Research of the location
- &Study of the feasibility, financing, etc..
- Arrangement
- Legal, technical assistance, communication,…
- Training of the staff
For the opening :
- Validation of the installations
- Supply and set up
- Communication on the catchment area,….
After the opening :
- Permanent assistance.
- Animation program
CAN I ACCEPT THE OPERATING CONDITIONS OF THE FRANCHISOR?
- Respect the instructions
- Apply the commercial policy
- Respect the restocking instructions
- Contractual, financial obligations, communication,….
FRANCHISE-CLUB.INFO assists you permanently in your relation with the franchisor and in the set-up of your activity.
This is a standardized form. It allows :
- you , candidate franchisee, to better identify yourself and thus to know for which franchising you are made
- to the franchisors to understand quickly the profile of the candidate
- the FRANCHISE.FR expert system to connect the profiles of the candidates and those researched by the franchisors
Don’t forget to precise at the end of the questionnaire if you want :
- keep this confidential profile only for you
- send it to a franchisor
- That FRANCHISE.FR analyzes it to indicate to you the compatible franchising
Please click here to fill in the form.
Laws and Contracts
The bases of the franchising right
Contrary to what the candidates think, in a lot of countries, there does not exist a specific law about the franchising, but there are laws that are applied on the franchising any other form of networks.
It is about the right :
- of competition,
- the right of brands,
- the right of labor,
- the regulation on the commercial leases, etc…
(If you are not living in France, in Belgium, in Switzerland or in Morocco, this does not prevent you from verifying if your country has laws that are not applied to the franchising.)
That’s why the European code of conduct which is a code of « good conduct » elaborated by the Franchisors to discipline the franchising policy and is often a reference for the courts.
It’s him who defines what the professionals find « normal » and balanced.
In absence of a law on the Franchising, the contract is thus the essential document of the relation between Franchisor– Franchisee.
We must avoid the standard contracts and prefer the custom-made contracts for a precise network and which avoid thus the « roughly » that we regret later.
In France, the very known Doubin law does not govern the Franchising but the pre-contractual relations. It concerns all the forms of network if the application conditions are gathered. It aims at helping the candidate to make decisions knowing all the facts.
In Belgium, it's the Laruelle law which fills in this function in a quite similar way.,
Morocco does not have a law on the pre-contractual information.
Algeria, is preparing a law on the franchising in order to determine what is "classifiable" under the franchising term and to facilitate and codify in the future, the payment of the entrance rights and royalties to other countries.
Finally, the European regulation of exemption conceived by the European commission has a growing position in the law and is gradually becoming the most important text for the European franchising
It allows defining the authorized and prohibited terms and is becoming an inescapable base at the moment of the elaboration of the Franchising contract.
what is shown normally in a contract of franchising (Be careful to the changes that can intervene because of the laws in certain countries.)
• Clauses essentielles du contrat
- What is the brand or the sign concerned ?
- Detail about the registration of the brand.
- Definition of the know-how transmitted to the franchisee.
- Precisions about the transmission of the know-how, the training and the manuals sent to the Franchisee.
- Detail of the potential territorial exclusivities.
• Application of the contrat
- Commitments of each one, before, during and after the contract.
- Precisions about the standards to respect.
- Detail about the potential exclusivities of supply or reference.
- Possible limitations on pricing policy.
- Term of Intuitu personae and approval of the successor (the contract is concluded according to the personality of the franchisee and cannot be ceded to a potential purchaser without the agreement of the Franchisor.)
- Confirmation of the independence of the parties.
- Terms of confidentiality, of non-competition, of non-affiliation, of denial to exercise other activities, etc.
• Composantes financières :
- Entrance fee.
- Royalties
- Other remunerations
- Contributions and a minimum of advertising budget.
• Advertising and Brand image :
- Which ad at the opening, then in current exploitation.
- At the National and/or Local level.
• End of the contract :
- Duration of the contract.
- Modalities of end of the contract before its stipulated end date.
- Modalities of renewal.
- Term of post-contractual non-competition.
- Pre-emptive right.
- Modalities of the business cession.
• Why there are laws on the Precontractual Information?
- The franchisee chooses his network according to the information that he receives and the biggest part of this information comes very often from the Franchisor. Therefore, this information should be accurate, sincere and quiet complete so that the Franchisee could make decisions knowing all the facts.
- The Franchisee should also be protected against his potential trend to « dream » and to make decisions without having all the useful elements. Finally, we must avoid, even if it is increasingly rare, that bad franchisors or persons with bad intentions intervene to make the franchisee decide on inaccurate or overoptimistic bases.
- All the countries still do not have laws on the pre-contractual information but a big number are thinking of such a law by taking as an example the American laws or the French law of the 31 of December 1989 knows as the Doubin Law from the name of the French minister of trade who has voted for it. In the United States, the document that the franchisor should give to the franchisee is designed by the initials U F O C. In France, it is designed by the letters D I P.
• The field of application
- To avoid that « little crooks » say to not practice franchising to not respect the laws Information to give to the candidate before signing the contract of Franchising, the countries tend to adopt the French law that is applied for the Franchising as for other networks between the private persons.
- To simplify, we will say that the obligation of pre-contractual information should be (notably in France) applied as soon as it comes to an exploitation of network with a total or a partial exclusivity obligation for the exercise of the activity mentioned in the contract. Jurisdiction tends to consider that increasingly number of networks has to comply with it and it is obviously normal since it comes to protecting the franchisee. – Study up on the legislation of your country.
• Content of a Document of pre-contractual information
(here is a French example consistent with the Doubin law. We will add later the Belgian example consistent with the Laruelle law)
- Who is the franchisor ?
- Who are the managers ?
- The history and the state of the network.
- The list of the franchisees.
- The outputs of the network.
- The financial and legal obligations.
- A state of the national market.
- A state of the local market.
- Useful appendices: Balance sheet, Inpi....
What is the purpose of FRANCHISES.FR ?
• Who visits FRANCHISES.FR ?
You are thinking about creating your business and benefiting from the advantages of a network.
you want to know more about the franchising, the license and the other forms of network…
you want to be in contact with certain signs or ask them questions , study them, compare them, evaluate them.
you want to know which efforts you have to make from your part in exchange for advantages given by the networks.
you are looking for an advice or an information.
• FRANCHISES.FR helps you online FOR FREE !!
Know about: The directory, the guide of the future franchisee and the news allow you finding the information you need about the Franchising and about the networks and preparing your contacts with the franchisors.
Contact a Franchisor: Directly on www.franchises.fr, you ask for the documentation of a franchisor, you question him; you apply to become a franchisee
Be assisted: If you want it, we can advise you or connect you with the networks which search for candidates having your profile because you cannot know which networks need you.
All we wish is the success of y our project.
Other questions :
The European Code of conduct defines the franchising as a system of commercialization of products and/ or services and/ or of technology, based on a close and continuous collaboration between the companies legally and financially distinct and independent and composed by the franchisor and his private franchisees, under which the franchisor gives to his private franchisees the right and imposes the obligation of managing a commerce, in conformity with the concept of the franchisor.
This right authorizes and compels the private franchisee, in exchange for a direct or indirect economical counterparty, to use the corporate name and/ or the brand of the products and/ or services, the know-how, the technical and commercial, the procedures and other rights on the industrial and/ or intellectual property of the franchisor.
For this continuous provision, the franchisee benefits from commercial and technical assistance, within and during the terms of the written contract of franchising, concluded for these purposes between the parties.
The greatest responsibility burden for the franchisor consists in training and bringing a continuous assistance for the franchisees, ensuring that the management of every franchised unit is compatible with the system that he has transmitted.
The franchisor must not only transmit to the franchisee a product or a service. He should also transmit, as it is provided in the European Code of conduct, the right to use the brand and the other rallying signs of the clients as well as the access to the body of knowledge which are the result of the experience, of the know-how, of the technical and commercial methods, of the procedures.
He transmits therefore definitively an entrepreneurial concept, inherent , confidential, which has made its proofs and profitable and he assists the franchisee in the use of this body.
As well, the pilot units can execute two other parallel functions:
a) Training centers for the new franchisees.
b) experimentation of new products or services, before they are extended to the network.
This experience, he usually gains it in the shops that belong to him, such as the branches (same company) or the subsidiaries (separate companies that belong to him).
These subsidiaries or branches, or only certain some among them, serve to improve the know-how, to experiment it or to show to the network the evolution of the concept such as the new franchisees reproducing it. Whether they are units of laboratories or models to reproduce, the language of the franchising designs them under the name of pilot.
But we may find also that the franchisor has signed agreements with participants either pilots.
or because the franchisor dis not invest himself in a unit (Why ? Because of a lack of resources? Learn more) or because he desires to benefit from other reactions than those of his own units. (rarer but healthier)
The period of training of the franchisees is generally composed by two parts distinctly different:
a) A period of theoretical and practical training, accomplished in the premises of the franchisor and in the open establishments.
b) A second period of support in the opening and the launch of the franchisee on the same locations of the franchised center.
- Industrial franchising: it is about a form of business collaboration between manufacturers. The franchisor is the owner of a manufacturing system and/ or of exclusive patents, which he cedes for another manufacturer who replaces them in a concrete zone. Given the ease with which the franchisee could supplant the franchisor, by copying the forms and the received methodologies, generally speaking, the franchisor does not cede to the franchisee, the entirety of the production process but only a part.
- Commercial franchising: In his turn, it can be divided in :
- A Franchising of product or of distribution : It is about a franchising the purpose of which is to market one or many products, normally manufactured, distributed or selected by the franchisor in an exclusive way, or not. (Example: clothes)
- Franchising of service : The object of the company consists in a service or a set of services, that the franchisee markets, according to a methodology that he has received from the franchisor. This type of franchising requires a bigger control from the franchisor in order to ensure the appropriate quality of the service provided. (example: Hotels)
- Mixed franchising: It is about a franchising the commercial purpose of which integrates both the product and the service. (Example : certain restaurants)
- Entrance fee. This membership fee is justified as follows :
- The right of using a known brand that the franchisor gives to the franchisee.
- The process of training and assistance that the franchisee has to receive from the franchisor before and during the opening of his establishment to the public.
- The partial compensation paid to the franchisor on the investments that he hs realized for the finalization of the franchising.
- The entrance fee depends also on the potential of the exclusivity zone to which the franchisee can access.
- Royalty or exploitation royalty. It is the amount that the franchisee must periodically pay to the franchisor for the continuous assistance and support that he gives. Countrary to the entrance fee, this amount represents the principal source of revenues for the franchisor.
- Advertising royalties. Its goal is to constitute a common fund intended to invest in the actions or the advertising campaigns, from which all the chain can benefit. (Notoriety and brand image, promotional actions...)The advertising royalty must not represent a source of revenues for the franchisor, since the franchisor is nothing but a simple administrator of the received revenues. Consequently, it is recommended that the franchisor resorts to separate bank accounts to collect the revenues and the advertising fees and provides the details information about the final received amounts for which these funds have been previewed.
The brand can also suffer from actions and errors of bad franchisees.
This can be avoided only through a process adapted of selection and training and of an efficient system of periodic control.
It isdifficult to impose determined behaviour to a franchisee than to an employee in a branch system.
Another disadvantage may be the fact of sharing the benefits with the franchisee but the financial needs of the franchisor are much less as well as the structure (staff) that he has to employ.
He must also pay back a part of its margin to the franchisor in exchange of received services and advantages.
He must also pay back a part of its margin to the franchisor in exchange of received services and advantages.
One of the fundamental keys consists in franchising only the trades that have already been fruitful.
The acceptation on the market of the product or the service if front of the franchisee constitutes the minimal condition to be able to create a franchising intended to last for a long time.
On the other hand, it is also important to ensure the quality of the know-how, the simplicity of the method and its ability of transmission to third parties.
Later on, it is essential to constitute the documentary base of the project. The documentary base represents a direct consequence of the practical experience of the franchisor and the aspects which define the project of franchising.
It is indispensable to transfer these knowledge and experiences so that they constitute a homogenous set moving the personal variations which can affect the trading scheme which have given its proofs.
We must also establish the standards of procedure and conduct within the chain, fix the commitments, the rights and the obligations burden for the parties, precise the common corporative image, as well as the necessary decoration in the premises.
The elements integrated in the documentary base of a franchising project are the following :
- The Operational Manuals of the System
- The contract of franchising
- The Manual of visual identity and the corporative image
- The commercial folder
The manual of conformity and decoration of the premises.
The guide of franchise on Franchise.fr, the consultants in Franchise, the specialized lawyers, the chambers of commerce, the Association of the Franchise of your country could be very useful to enlarge your general view and to compare the collected information.
During your conversations with the managers of the franchise, it is possible to evaluate the following aspects: the structure of the franchisor to train youand help you (according to the level of the network growth), the economico-financial ability, the knowledge of the managers on the profession and the concept, the years passed in the sector, the number of franchisees and their loyalty towards the network and especially, estimate the level of selection that the managers give for your case (are-they demanding concerning your personal profile and the position of the premise?).
You should know that they are demanding towards you and towards all the other franchisees as well. Finally, don’t forget that it is always useful to discuss with existing franchisees.
Ultimately, their role is to a role of supporter until achieving success.
That’s why, it is necessary that the consultant could be based on valid experiences which allow finding the way which is mostly adapted to his client, by taking into account the profile, the needs, the capital and the expectations of the potential franchisee.
To sum up, a good consultant is a good tailor, able to make a tailor-made suit for his client, franchisor or franchisee.
But to keep a network at a good level, the franchisor will desire to participate to the selection of the acquirer, as he has selected that person who, desires, today sell the company.
It is the contract of franchise which will determine the procedures to follow by the franchisee.
Normally, they will include a notice, so that the franchisor could exercise the pre-emptive right, a process of selection and a final decision, that can be negative if the franchisor finds justified reasons to not accept the new candidate.
The know-how must be confidential, substantial and identifiable.
The principal franchisee becomes therefore a franchisee compared to the original franchisor, by exercising normally the functions of franchisor compared to the private franchisees who have concluded with him a franchise contract. Some people compare this position with that of an importer or a wholesaler and this is true enough.
If this is provided this way and it is generally the case when the franchisor has to ensure new benefits to achieve the success of the new franchisee
Rectification of the standards, training, assistance, etc...
Ask the franchisor what has been provided.
The franchisor can refuse if it is provided in the franchise agreement that he can do so
It is good to have amassed experience "from the others". But separately from these evidences, there is not a minimum of experience to become a franchisee. The required competences are different for a franchisee in bakery and in clothing and your application will be therefore assessed differently according to the profession.
However every franchisee must have a certain sense of commerce and management as well as autonomy without independence. The franchisee must be able to be committed to follow the rules of the network...and do so
- the consumer does not differentiate between a branch and a franchisee who have both known signs
- the consumer goes to what he knows and what reassures him.
Objectively he has more chances to know a great network and to be seduced by its advertising than an isolated trader and the fact that the offer of the great is known reassures him.
It is the know-how that makes the difference with the concession that offers the sign and the collection of products or/and services but without transferring a know-how.
The fact of being a franchisee does not mean that one is not a creator of a company but it means that he/she is based on a network, on a sign, on a know-how, on an assistance of the franchisor, etc...
The Franchise is thus one of the ways of creating his/her business and is not an opportunity instead of the creation of a business.
Between the two concepts, there is the concession through which one concedes the right of marketing a range of products or of services in addition to the brand and under the brand. (Obviously, the franchise resumes also the concession of a range of products or of services)
Yes, the franchise is adapted to the exportation as well as to the national market.
The total to borrow includes the acquisition of the premise, the works, the stock, the entrance fee, the costs of the establishment predominantly.
The franchisor always helps to assemble the folder or gives you the information to do so.
If your business does not work, in franchising as elsewhere, you lose your contribution and you also must pay the amounts for which you are depositing.
He also takes the profits and supports the losses.
If the franchise do nor precise how much "we gain" in their brochures, it is because the provision is impossible without the consideration of the city, the competition, the person, etc...
But be careful to the networks without obligations.
You can improve your business in a direction and your network neighbors in another.
The policies of every participant will diverge which will weaken the brand image of the network. Without talking about the consequences of the absence of standards hygiene, service, look etc...
Obviously, the franchisor who has 5 franchisees cannot do Television. But he can make advertising campaigns for the set of his network even if these campaigns use local supports such as the regional newspapers or the displays.
In conclusion, National ad= Ad used by the entire network and not simply a use of national supports covering the totality of the country.
You benefit from the amortization of the fixed costs on 5 units instead of only 1. Of course, adapted Medias have to be used.
On the one hand, they force the franchisor to respect the exclusivity of the franchisee, by not excercising him self his activity and not allowing third parties opening units within the exclusivity area.
On the other hand, they prevent the franchisee from taking measures to attract the clients outside the exclusivity area, avoiding any interference in the area of the other franchisees.
A N°1 location is called this way because it is good for every type of commerce aiming at the largest target. Most often we find in it the equipment of the person. They are the most expensive.
This means that certain professions have other criteria and that the best locations for them are in different places. (Furniture, Restaurants.....)
You can find:
- by specialized agencies of your city (see the panels saying "Sold by xy")
- by asking the traders yourselves
- by asking the target franchisor about his method, see his "stock"
- Determine your profile of competences :
1/ Draw a table in which you draw a column :
1) A first list of your competences and your experiences.
2) Put with a "pencil" a first estimation of your level. You will correct it later.
3) Indicate the points where you can progress alone.
4) Indicate those where you will need help or trainers.
2/ Complete your table by indicating the competences and the experiences that you find necessary for such a network or such a profession.
3/ Your profile of competence is ready but you realize that you would like to boost it in parallel with your research of the Franchise that suits you the most.
- Identify the other criteria of your profile :
But in Franchising, the profile includes also other criteria (Draw a table) :
1) What are your tastes and motivations?
Concerning the products, the activity, the importance of the staff…. ?
We cannot achieve success in a profession that we do not love and if a franchisee does not work hard.
2) What is the amount of your personal financial contribution ?
What are the financial guarantees that you can potentially bring to the bank for your loan ?
3) What is the amount of the loan that you do not like to exceed ?
(Your opinion will certainly change as your research will go along).
4) What is the support level that you are obtaining from your family for this project?
5) What is the risk level that you accept?
- Look for the Franchise that suits you the most.
Your profile is ready. You can begin searching on www.franchises.fr for the Franchise that suits you the most, I, e the one that corresponds to your profile.
We do not know it is about which concept nor what you know about our markets for your concept but a priori we should think about the following actions:
- study the potential and the competition for your concept in France and in Spain
- Raise the question of potential legal, administrative, logistic constraints etc.
- verify the economic feasibility (account of franchisees exploitation, etc...)
- study the French and Spanish legal standards (European Union and some specific features among which Doubin Law on the precontractual information = simplified UFOC )
- choose between master, subsidiary, direct franchise, joint-venture
- prepare the plan of development and recruitment
- « Francise and « Espaniser » the tools ( i am not talking only about the language but also about the content of the manuals, platelets, etc..
Ultimately, their role is to a role of supporter until achieving success.
that’s why, it is necessary that the consultant could be based on valid experiences which allow finding the way which is mostly adapted to his client, by taking into account the profile, the needs, the capital and the expectations of the potential franchisee.
To sum up, a good consultant is a good tailor, able to make a tailor-made suit for his client, franchisor or franchisee.