There are many regulations, standards and requirements put into place in every franchisor and franchisee relationship. This is to ensure the highest quality possible throughout the companies brand, regardless of the location or actual owner. With the length of most contracts being between 3 and 5 years it is really important that you understand the franchise relationship.
Below is a better insight into what is expected in this sort of relationship:
Franchisees accept that in return for the advantages enjoyed by them, by virtue of their association with the franchisor and all the other franchisees, control of quality and standards in the systems is essential.
Any bad franchisee can have an adverse effect, not only on his own business, but indirectly on the whole of the franchised chain and its other franchisees.
To minimise this risk, the franchisor will impose standards and demand that they are maintained so that the maximum benefit is derived by all franchisees.
This regulation of standards however is not intended to stifle entrepreneurship and innovation at franchisee level. In fact many marketing, product or service innovations in existence in major franchise systems today are the result of ideas generated by one or more franchisees within each system.
Most franchisors do encourage their franchisees to make contributions to the development to the business of the franchised chain which their individual talent and qualities permit.
The relationship between franchisors and franchisees has often been termed a “commercial marriage”. In many ways this is true, though the difference is that in the franchise relationship there must by definition be a “senior partner” – the franchisor. Also, the franchise agreement defines the entire basis of the relationship up front, so that both parties know their rights and obligations to the relationship.
Now that you better understand the franchise relationship you can better understand what is expected of you with your new franchise endeavor.
Does anyone with experience feel that we left anything really important out and what would that be?
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