What are the Responsibilities of the Franchisor When you Franchise Your Business?

by FMS Franchise | Articles
4 minutes
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When you franchise your business, you transition from operator and “DOER” to a mentor and “COACH”.  The responsibilities of the franchisor shift to a new focus where you as the entrepreneur/CEO now are in charge of helping others be better and be efficient in operating their business using your brand and your business model.  Your focus transitions to holding others accountable instead of actually doing the work.

The franchisor is the company that grants the franchisee the right to operate a business using the franchisor’s trademark and business model. The franchisor’s responsibilities include:

Table of Contents

1.  Training & Support to the Franchisee.

Providing the franchisee with training and support on how to operate the business. This includes initial training on the franchisor’s business model, operations, and systems. It also includes ongoing support to help the franchisee navigate challenges and capitalize on opportunities.

2. Proprietary Systems.

Providing the franchisee with access to proprietary systems, processes, and trademarked products or services. This includes things like the franchisor’s trademark, branding and marketing materials. It also includes access to the franchisor’s supply chain, technology, and other resources that are necessary for the franchisee to operate the business.

3. Franchise Agreement.

Monitoring the franchisee’s compliance with the terms of the franchise agreement and any applicable laws or regulations. The franchisor is responsible for enforcing the terms of the franchise agreement, which may include standards for quality, customer service, and appearance of the franchise location. Additionally, the franchisor is responsible for ensuring that the franchisee is operating in compliance with all applicable laws and regulations.

4. Marketing & Advertising Programs

Providing ongoing support and assistance to the franchisee, such as marketing and advertising programs, new product or service development, and access to group purchasing programs. This support can take many forms, such as regular training programs, webinars, and seminars. Additionally, the franchisor may provide marketing and advertising programs that are designed to help the franchisee promote the business.

5. Protecting the Trademark.

Maintaining the trademark and protecting it from infringement. The franchisor is responsible for protecting the trademark, which is the unique identifier of the brand. This includes monitoring for potential infringement and taking action to protect the trademark.

6. Help Franchisee to Stay Competitive.

Continuously improving the system, products or services to stay competitive and meet customer demands. The franchisor must continuously improve its systems, products, and services in order to stay competitive in the marketplace. This includes researching customer needs and preferences, developing new products or services, and updating existing products or services to meet changing customer demands.

7.  Advisor to the franchisee

Act as a mentor and advisor to the franchisee. The franchisor should be able to provide guidance, advice, and support to the franchisee throughout the life of the franchise relationship. This includes helping the franchisee to overcome challenges, capitalize on opportunities, and plan for the future.

8. Financial Assistance.

Providing financial assistance and access to financing. Some franchisors may offer financing assistance to franchisees in the form of loans, grants, or other forms of financial assistance. This can be particularly beneficial to franchisees who are just starting out and may not have access to traditional forms of financing.

9. Build & Maintain Relationships.

Helping the franchisee to build and maintain relationships with key suppliers. The franchisor may help the franchisee to build relationships with key suppliers, such as vendors and manufacturers, in order to secure better pricing and more favorable terms.

10.  Training Programs.

Helping the franchisee to attract and retain employees. The franchisor may help the franchisee to attract and retain employees by providing training programs, employee recruitment assistance, and other resources.

11. Market Research & Analysis.

Provide market research and analysis. The franchisor may provide market research and analysis to help the franchisee to understand the local market and make informed decisions about the business.

Helping the franchisee to navigate the legal and regulatory environment. The franchisor should be able to help the franchisee to navigate the legal and regulatory environment in which the business operates, including helping the franchisee to understand and comply with all relevant laws and regulations.

Conclusion:

Overall, the franchisor has many responsibilities, but when you start a franchise, part of what you will need to define is how involved you choose to be with franchisees.  Some franchise systems are heavily involved and directly manage a wide range of responsibilities for franchise owners, while others provide the blue print and overview of the model and the franchisee is required to implement and execute, there isn’t one way to franchise your business.

For more information on how to franchise your business and how to start a franchise, contact FMS Franchise.

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