It's obvious that working with a specific franchise will entail a plethora of its own rules and conditions. These rules will be determined by the franchisor's requirements and the terms of the agreement. Nonetheless, we have formulated five basic rules that will be useful to any franchisee, regardless of the industry and franchise chosen:
- Focus on long-term collaboration. In successful networks, successful franchisees work for decades and play a huge role in the brand's development and competitiveness. It's much more advantageous for the franchisor to work with existing franchisees who adhere to the franchise standards and show satisfactory results than to search for and select new ones. For franchisees, long-term collaboration is an opportunity to manage a brand without spending decades, and sometimes even hundreds of years, creating and developing it. Moreover, successful franchisees can aspire to obtain a master franchise and develop a business not within a single location but within a specific territory, transitioning from a small business status to medium and even large.
Often, the franchise agreement (and in some countries, this is a legal requirement) includes a provision stating that a conscientious franchisee, upon expiration of the contract term, has the preferential right to conclude a new contract on the same terms. Moreover, in some cases, no initial fee is required when renewing the contract.
- Adhere to standards and rules.Adherence to standards and rules is not only a guaranteed way to avoid penalties and sanctions from the franchisor but also prevents errors made by others. The franchisor's rules are "written in blood." It's worth remembering that the franchisor has been in this business longer than the franchisee. And if the network includes a certain number of franchising points, then, in addition to their own experience, the franchisor receives a wealth of relevant information, behavior options, and the consequences of such actions daily. Adhering to standards protects the franchisee from mistakes already made by others.
- Develop the network's competitive advantage. Following the rules does not mean refraining from introducing innovations if they are the best solution. Many franchisors note that they owe much of their development to suggestions and influence from franchisees. In the world of franchising, there is a legend that the most popular and profitable product of the McDonald's network, the Big Mac, was actually invented by a franchisee of this network. At the same time, it is necessary to observe the rule that any proposal for a system change (even if the change implies improvement) must first be made to the franchisor. And only after obtaining the franchisor's consent can the franchisee implement such an innovation in their work. Such a rule protects the franchisee from impulsive actions that someone else has already taken, as we mentioned in the previous paragraph.
- Don't fear control.It is believed that it is precisely the control from the franchisor that causes the greatest inconvenience to the franchisee in their work. However, control is the only way to establish that the franchisee's performance indicators are far from ideal and to suggest adjustments to their work. Franchisees should embrace franchisor control because it is what allows them to become more successful.
- Take responsibility for your business. Once again, we remind you that the defining word in the phrase "franchise business" is "business." Thus, such a business should be conducted at one's own risk and under one's own responsibility. The franchisee is responsible for market research to ensure the demand for the offered goods/services and their relevance. Additionally, the franchisee is responsible for compliance with legal requirements and the fulfillment of other rules and restrictions in conducting the business. Except in specific cases, franchisees are responsible to customers for the quality of the goods and services provided.
At the same time, under equal conditions, a national franchisor will provide the franchisee with more assistance and support than a foreign one. For example, only a "local" franchisor will recommend a registration algorithm, help select a taxation system, provide advertising support, and clarify all the smallest nuances of work.
It is advisable to attract a foreign franchise:
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to introduce a brand to a market where it is not yet represented but is known,
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to introduce a product or service to the market that was not previously available.
Almost always, acquiring a foreign franchise requires adaptation to market conditions.
An important recommendation is that the less experienced the franchisee is, the closer they should look for a franchisor.
