The advantages of a franchise over an independent business are aplenty. A Franchisor must furnish valuable services to its Franchisees.
Franchisee will have his own corporate name as Incorporation or individual business owner but the franchised business operates under the Trade Name of the Franchisor.
Franchisors should knows where franchised businesses should be opened, which locations are good for a Franchisee and which not, which may be determined generally by location, most important with food franchises or other aspects, like purchase power of a certain area, etc.
Sensible and complete specifications, standards and operating procedures, the so-called system standards, effectively communicated to Franchisees and readily understandable.
The “How To” documentation of the business operation and the implementation of the system.
The right to use the logos, signage, slogans and Trade Marks of Franchisor. It is not enough that a Franchisor has a DTI Business Name registration or a SEC registration, he has to obtain a Trademark from the Intellectual Property Office, which is located at Sen. Gil Puyat Avenue in Makati.
Transfer of business experience is transferred from Franchisor to Franchisee
Wisdom of Franchisor
The Franchisor went through the “labor pain” of opening the business by himself some time ago. For a new Franchisee that trial and error period is eliminated.
Effective initial training is critical to achieve positive Franchisee attitudes regarding system standards, the operation, the Franchisor and the value of the franchise and depending on the business can take from 5 days up to 6 month.
Site Selection Assistance and Approval
Franchisors in the Philippine usually do not provide locations and prospective Franchisees have to find them by themselves. However, Franchisors will know where a franchised business shall be located within a certain area and will inspect the site prior to the start of construction or operation, if the location is suitable for the franchised business.
Store lay out
Franchisors will provide lay out assistance and supervise the construction of a new franchised store. The entire construction cost is at the expense of the Franchisee, and has to be paid as due to either the Contractor or Franchisor, depending on the arrangement.
Most Franchisor will award new franchises with an exclusive Territory, which depends on the kind of business can be a certain radius in meters or a floor in a mall, a whole City or a whole province or City or several of them as Area franchise or even a whole Country as Master franchise.
Franchisor will provide a listing of authorized suppliers for equipment’s, goods, materials and services.
Franchisor assistance in hiring personnel for the Franchisee by giving the guidelines for needed staffing and training them, and set-up of the franchised outlet. Franchisor’s management and staff assist new Franchisee upon opening of the franchised outlet to operate it smoothly from day one onwards. Franchisors representative will remain in the Franchised Facility for a period of time as determined by Franchisor to assist Franchisee in the initial operation phase.
Franchisee may have to contribute to a National Advertisement Fund, a Co-op Advertisement and spend some amount for the initial Opening Advertisement and the ongoing Local Store Marketing activities.
Effective Field Service
Operational support is needed by Franchisees for occasional questions and problems. Knowledgeable and well-trained personnel with positive attitudes and a willingness to help Franchisees are provided by Franchisors. Franchisors shall also be available to Franchisee via phone, email, fax or text for urgent problems arising from the operation of the franchised business. Important is also that Franchisor and his representative regularly visit the franchised outlets.
Research and Development
Businesses face tough competition and new products are constantly to be tested and introduced in the market. The job is with the Franchisor in development of new products and service, improvements of equipment’s, formats, operating efficiency and trying to beat competitors.
Author: Rudolf A. Kotik of www.rkfranchise.com