BF10: Principles of Business and Finance Fall 2015 7.02 Franchising BF10: Principles of Business and Finance Fall 2015

Three primary elements define a franchise relationship: The use of a common trademark The provision of assistance to the franchise The collection of fees, royalties, mark-ups or other monies from the franchise If you have all three elements, you are a franchise, regardless of what you call it Some state definitions vary, but are generally similar What is a franchising?

Why do Companies Franchise? The ability to expand using franchisees’ capital Franchisees are typically more motivated to succeed than salaried managers Franchising promotes increased quality at the unit level Franchising enables a company to grow faster than it otherwise could through corporate expansion Reduced risk and liability for the franchiser Fewer concerns over day-to-day operations Why do Companies Franchise?

In Order to Franchise, Your Business Should be . . . Established and profitable Unique in the marketplace Readily teachable to others Attractive in terms of the proven return on investment Marketable as a franchise opportunity Transferable to other markets or types of locations In Order to Franchise, Your Business Should be . . .

How Do I Franchise? Develop a business implementation plan Draft legal documents required by law Develop an Operations Manual Establish quality control mechanisms that franchisees will be required to follow Plan your marketing Develop a web page dedicated to your franchising effort Develop marketing materials to help sell franchises Design a franchise sales strategy Advertise your franchise opportunity to generate leads How Do I Franchise?

Source: http://www.ifranchisegroup.com/powerpoint-presentation/