FRANCHISE ADVICE
Operations manual The detailed document, or 'Bible', which describes every item of the business system and work procedures.
Pilot operation An independent operation that tests the franchise concept and incorporates actual financial, organisational and logistical pressures to be faced by franchisees in different areas.
Profit & loss (P&L) projections The calculations, based on the franchisor's, pilot's and franchisees' experiences, that try to predict how soon franchisees can expect a return
on their investment, year-to-year turnover and profits.
Renewal The legal provisions in the franchise agreement for renewing or not renewing the franchise for a further term.
Return on investment (ROI) The calculations or expectations that franchisees work on to assess when they can 'break even' on their initial investment in the franchise and start earning profits.
Term Period of years (eg five, 10, 15) for which a franchise is granted
through the agreement.
Termination The legal provisions by which either party in the relationship may terminate the contract, eg for breach of contract.
Territory/area The 'exclusive' portion of land, on a national, regional, county or postcode basis, which is allocated to franchisees as part of the franchise package.
NICK WILLIAMS Managing consultant at Ashtons Franchising Consulting
www.ashtonsfranchise.com
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BUSINESSFRANCHISE.COM
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