Franchising is a two-way business model. You may be the Franchisee as of today. When you are successfully implemented and realize your dream, then you are really to have a master Franchisee. As a master Franchisee, you can start recruiting your Franchisee reporting to you. So, with this arrangement, you are acting like “Franchisor”, except you do not own the “Brand”.
Another proposition is that you have a profitable business and can be duplicable for business expansion. But you need someone to put in the finance and operational staff to run the business expansion locally and regionally.
Master Franchisee
To be the master franchisee, you would have experience to run as a profitable business. This would add credit to you and you would also know what has done right and what mistake to avoid in franchising. There would have been some adjustment for local needs as well as enhancement to the products and services. Your sharing as a Franchisee would gain more respect compared to those without real life experience as Franchisee.The potential franchisees could also visit you and observe the actual situation. You could reinforce the do and don’t in franchising.
Franchisor
To be a franchisor would need time and effort.
Firstly you must ask whether this really what you personally want. Some would call it as passion to what you wanted to do all the time.
Or you would like to create a Franchise business model and get one of your staff to take over the business development and running the business while you enjoy doing the research for franchising business. When starting up the Franchisor’s business, the risk factors are different.
Secondly, you need to engage consultant and/or specialist to look into your operations model, financial commitment and the liaison work.
Thirdly, it is the franchising fee, royalty payment and product lines.
This is some fundamental that we need to address before we just jump into it.
You would establish your current business conditions and consideration of core attractiveness.
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What attract customers and your target market?
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What is the level of service standard for Foods and Beverages business?
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What are resources needed to set-up the Franchising organisation?
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The Financial indicators.
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How to choose the right person or firm to be your franchisee?
When you are able to establish the “X” factor that attracts people, you would be able to define the critical success factor for the business. For food and beverage industries, your service indicator(s) is important.
Next, you would need to engage people or consultant to do the operations manual and training manual. Your marketing strategy and participation from potential Franchisee would need to be documented. You also need to assemble a team – Franchise Manager, specialist in Food and Beverage and for set-up and further audit.
From the preparation work and documentation, you are ready to be a Franchisor. Next, you need to do your financial computation or budget. This financial tool is equally important as your Franchisees would like to know the risk involved and be prepared for any eventual happenings. You can be a Franchisor too.
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