Franchising Your Business
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Written on 14 January 2014
If you are looking to expand and take advantage of the success
of your business, no business owner can rule out franchising. Many
successful brands such as Starbucks, Costa Coffee, McDonalds and Subway
have taken advantage of their brand and business to successfully move
into new markets and expand their retail outlets by franchising its
The franchise format works with the business owner (i.e. the
franchisor) licensing the brand, products and process by which the
products are made to a franchisee. The franchisor provides a full
breakdown for the franchisee on how to run the outlet. The franchisor
will prepare the following:
- Operations Manual.
- Contract setting out the parties’ obligations - The
- Any additional documents you require to promote, market and
run the business.
It is intended that the business package will give the
franchisee all it requires to hit the ground running. The franchisor
will continue to support and promote the business in return for a
licence fee and royalty. The advantage of a business choosing the
franchise route includes:
- The cost of setting up and running the new outlet is borne
by the franchisee.
- The franchisor is able to grow its business and brand by
using the franchisees capital.
- The franchisor is no longer managing each outlet but is
providing support, training, marketing materials and resources.
- The franchisor receives licence and royalty fees.
- The franchisor is able to continue to develop its brand and
protect its intellectual property rights.
- The franchisor can decide who to issue a franchise to.
The key to any franchise is to ensure the brand remains
protected and the reputation does not become tarnished. The actions of
each outlet therefore have to be monitored to ensure a franchisee
complies with the franchise agreement and the operations manual.
The franchisor will also need to ensure adequate support
structures are put into place for the franchisee and the franchisor has
adequate resources available to monitor the activities of the
franchisees. The franchisee will need to be guided through the initial
setup process and continually motivated throughout the term of the
If you are considering franchising your business you will need
- Your business is successful and profitable. No potential
franchisee will want to invest a loss making business.
- Your brand and intellectual property is protected. Prior to
expanding your business into a new market or new territory you should
carry out an audit and take all necessary steps to ensure the brand and
intellectual property is protected.
Here at Lawdit we specialise in franchising matters and have
advised both the franchisor and franchisee on many occasions relating
to franchises from Dominos Pizza, Metro Rod, O'Briens Sandwich Shops,
By Muhammed Poswall
About the Author
Solicitors offer services and advice for litigation,
commercial contracts, Intellectual Property and IT legal agreements. We
are experts in commercial law with a heavy emphasis on Intellectual
Property, Internet and e-commerce law. Lawdit is a member of the
International Trademark Association, the Solicitors' Association of
Higher Court Advocates and we are the appointed Solicitors to the
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Article Published/Sorted/Amended on Scopulus 2014-02-24 13:17:40 in Legal Articles