TOPICALADVICE
FRANCHISE CLINIC
Our expert panel offers advice and a range of issues for franchisors
Natalia Lewis has been with Hamilton Pratt since 2007 and works closely with John Pratt. Her particular areas of expertise include reviewing, drafting and amending franchise agreements, intellectual property matters and franchise and business sales and purchases.
I am a new franchisor. How do I reassure good leads that my business is an ethical franchise since I do not have a long history of franchising behind my brand?
Choosing a franchisor is a difficult decision for many, so it is important to show that you are putting in the work to be the best in your sector. Below outlines a few things prospective franchisees will be looking for and what you, in turn, should be doing to stand up against the competition. Much of the advice is as relevant for established franchisors, too.
Pilot Testing
Pilot testing is essential in proving not only the financial viability of the franchise but also that the business concept can be replicated with success. In the majority of cases, ethical franchisors operate several pilot units for a number of years before starting to franchise on a larger scale.
Training and Support
Good franchisors recognise that the success of their franchisees relies on their training and support. The initial training needs to be sufficiently in-depth to provide the franchisee with the knowledge and skills that s/he will need to start operating a
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business s/he might know nothing about. What often distinguishes good franchisors from bad, however, is the level of ongoing training and support provided to existing franchisees who may have been operating for a number of years. Different franchisees will require different kinds of support and where a franchisor is introducing something new, or changing the way in which its system works, then additional training should be provided. Of course you should not be looking to make a profit on training or support, as having confident and knowledgeable franchisees is ultimately in your best interests.
Documentation and System
One of the easiest ways of spotting a bad franchisor is by its documents. A good franchisor should ensure that all of its documents, including the franchise agreement and the manual, are reviewed and, where needed, updated at regular intervals. The law changes and so do our habits and practices. A good franchisor should be on top of such changes by ensuring that its agreement complies with the latest legislation and its system responds to developments accordingly. Go out of your way to do this, and consult a professional if you need to.
Franchisees
A good franchisor is one that puts the interests of its network above interests of individuals; who knows when to fight and when to compromise and one who would not hesitate to take action to protect its assets. Having a robust selection process in place demonstrates that you champion quality over quantity when it comes to franchisees, and therefore your franchise as a whole. Cement this ethos at the beginning stages and it will surely
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