If you’re looking to start your own business, knowing the ins and outs of franchising is essential. With record rates of growth and diversity, franchising may be the perfect opportunity for you and your finances.
But to start franchising, you’ll have to go through a “franchisor.”
A franchisor is a person or company that sells franchises to use brands, designs, and intellectual property. While acquiring a franchise isn’t impossible, understanding the franchisor’s role is critical to creating a business plan.
This article will dive deep into franchisors’ vital role within a franchise. They’re one of the key elements to keeping a franchise afloat.
Understanding a Franchisor
The franchise business model follows that an established company allows franchisees to use its brand. In this way, franchises get widespread economic growth and attention.
A franchisor is a specific individual or company that allows the use of a franchise’s brand and IP under its brand name. Franchise agreements typically include the following:
- A license to intellectual property
- The right to terminate
- Non-competitive clauses
- The grant of rights
- Obligations on each party
The franchisor receives a start-up fee, a yearly fee, and ongoing royalties. They will also receive a franchisor fee, from the franchisee.
A Franchisor and Franchisee’s Relationship
When embarking on starting a franchise, the connection between the franchisor and franchisee is essential. The franchisee is the independent business owner that works under a large franchise.
The franchisor will often act as an advisor to the franchisee, often providing training programs for running the business. Throughout the process, they constantly train and support the franchisee: providing input on hiring new employees and the best ways to sell products or services.
The Responsibilities of a Franchisor
Before a business owner transitions to a franchisor, they must understand their tasks and day-to-day responsibilities.
If you want to become a franchisor – or simply understand their role – explore the wide range of duties that fall under the franchisor definition:
#1 Finding the right franchisees
One of the essential franchisor tasks is finding responsible and reputable franchisees. When looking for a prospective franchisee, don’t rush into it. Operating a business is no small task. A franchisor must ensure they hire someone with all the necessary skills and qualifications.
A franchisor should conduct extensive screenings and interviews to confirm they select suitable candidates.
#2 Offering training programs
In many ways, franchisors are the boss, ensuring their employees (franchisees) are sufficient and successful. They must provide adequate training to delegate responsibilities and to show how a successful business looks.
#3 Staying true to their brand
A franchise is not just one business but a vast web of them.
When it comes down to your company: the brand is everything. Consider the competition. When somebody thinks of McDonald’s, they imagine golden arches. When someone thinks of Domino’s, they see red and blue. Simple, consistent branding allows a franchise to stand out from an over-saturated landscape.
Without consistency, consumers can’t and won’t trust a franchise which is one of the biggest benefits of creating a franchise business. Before making hasty decisions, consider your franchise locations, products, and services.
#4 Providing Long-Term Support
Once a franchisor hires a franchisee, their job isn’t done. Instead, they should offer continuous training and support. A franchisee is new to the business model and will require firm guidance and a steady hand.
Franchisors may offer recurring phone calls and meetings to provide the necessary support. Remember – when a franchisee succeeds, a franchisor does too. It’s a win-win business model.
At the end of the day, if a franchisor wants the best possible business, they must be a leader. A successful franchisor should offer constant, effective communication and clarity. Make clear your wants and needs. You are responsible for the franchise.
The Importance of a Franchisor
When starting your business, finding your franchisor may sound like a difficult hurdle, but it is an essential step to franchising. A great franchisor should:
- Find the best candidates
- Match their brand identity
- Provide comprehensive training
- Offer ongoing support and consultation
Whether you’re looking to become an advisor or an advisee, franchising may be the perfect jump start for you and your business. If you’re looking for a reason to strike, consider these points.
Franchises Make Money
In 2015, the UK reported that franchises contributed £15 billion to their economy. That’s a lot. Only three years later, the UK’s report had a different number: £17 billion. The significance of franchising is growing with each passing now.
Franchises are Growing at a Rapid Rate
In the last 25 years alone, the amount of franchises has doubled, with a diverse variety of business and franchising opportunities.
For further exploration of the subject, check out this franchise model.
Follow Your Gut: Begin Your Franchise Today
Though the business model may seem hard to crack, as you learn about franchising, your knowledge will expand. If you’re looking to jump in – now is a perfect time. With rapid growth and expansion, franchising has never been so accessible.
At Franchise Local, we offer over 400 UK franchise opportunities. Explore our different industries to see what may appeal to you today. The world of franchising is not as inaccessible as it seems. Dive in today!