1. BF10: Principles of Business and Finance Fall 2015
7.02 Franchising
BF10: Principles of Business and Finance
Fall 2015

2. Three primary elements define a franchise relationship:
The use of a common trademark
The provision of assistance to the franchise
The collection of fees, royalties, mark-ups or other monies from the franchise
If you have all three elements, you are a franchise, regardless of what you call it
Some state definitions vary, but are generally similar
What is a franchising?

3. Why do Companies Franchise?
The ability to expand using franchisees’ capital
Franchisees are typically more motivated to succeed than salaried managers
Franchising promotes increased quality at the unit level
Franchising enables a company to grow faster than it otherwise could through corporate expansion
Reduced risk and liability for the franchiser
Fewer concerns over day-to-day operations
Why do Companies Franchise?

4. In Order to Franchise, Your Business Should be . . .
Established and profitable
Unique in the marketplace
Readily teachable to others
Attractive in terms of the proven return on investment
Marketable as a franchise opportunity
Transferable to other markets or types of locations
In Order to Franchise, Your Business Should be . . .

5. How Do I Franchise? Develop a business implementation plan
Draft legal documents required by law
Develop an Operations Manual
Establish quality control mechanisms that franchisees will be required to follow
Plan your marketing
Develop a web page dedicated to your franchising effort
Develop marketing materials to help sell franchises
Design a franchise sales strategy
Advertise your franchise opportunity to generate leads
How Do I Franchise?

6. Source: http://www.ifranchisegroup.com/powerpoint-presentation/