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Franchise Advice


are aware that a line needs to be drawn between supporting franchisees in genuine need of support and those who are so demanding of their franchisor’s support that they substitute their own eff orts.


Improvements


The obligation to develop and improve the system, services and product range of a franchised business lies squarely with the franchisor. This obligation is fundamental and is one that cannot be delegated to franchisees.


One of the principal obligations of franchisees is to sell the goods or services that are the subject of the franchise, not to develop them. Of course, franchisees should be involved in assisting franchisors to a reasonable extent in testing any improvements. Mature franchisors also encourage franchisees to use their initiative to think of improvements and innovations, and to relate any ideas they may have as to how the business or the system may be improved to the franchisor. However, it is the franchisor who must decide whether


an idea is worth taking up and developing, and, when ready, passing it to the rest of the franchised network to incorporate into the franchised system.


Quality control Diff erent franchisors have diff erent methods of ensuring that quality is maintained throughout their franchised network, but before franchisors can do this they must be sure of the quality of their own system and products. This is best done by the franchisor having conducted a successful pilot operation. Having established the requisite quality and standards, the franchisor must provide suffi cient mechanisms in the franchise agreement to ensure that franchisees operate to the same standards.


Advertising and marketing This is one obligation about which not everyone agrees. Some feel that the obligation to provide, conduct and co- ordinate the advertising and marketing of the franchise, at least at the national level, should be that of the franchisor.


Much depends upon the nature of the business. In some cases franchisors are content to leave it to franchisees and feel that their business is such that it would benefi t little by any form of national or regional advertising. Other businesses are increasingly becoming reliant upon national or regional advertising and promotions as a necessary feature to ensure success. Even in businesses that do not need any form of direct advertising or marketing, many franchisors still undertake an obligation to provide franchisees with resources such as artwork, fl yers, leafl ets and a website. This ensures quality, standardisation and economies of scale for its franchisees. There are many more obligations that you could add to the above list, particularly if you take into account standards for businesses, such as quick printing, fast food or parcel delivery. Nevertheless, the above should at least help prospective franchisees to get some sort of feel for what they should be looking for, and, consequently, prospective franchisors to address these issues.


Manzoor Ishani


Manzoor Ishani is a senior consultant solicitor with Sherrards (Solicitors), a commercial practice advising franchisors and franchisees in the UK and internationally. He has specialised in franchising for more than 40 years and is a former member of the British Franchise Association’s legal committee.


www.sherrards.com mgi@sherrards.com


November 2016 | BusinessFranchise.com | 27


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