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How Franchising Works

How Franchising Works

Franchising has always been there in the market, but it is only during the last few decades that it has become so popular. Today, people are starting a franchise not as a last resort, but as a career choice. When a system works so well, it’s quite natural to question how it works. So, here is a rundown on how franchising works.

• At first, a company, after failing initially and learning from its mistakes, finds success with a given product/service. There must be something unique about the product/service that can make it special among its customers/clients.
• The franchisor then perfects the system by running a second unit or by opening a model unit.
• After enjoying success with the second one and establishing brand awareness (at least in the local market), the company starts thinking about learning how to franchise the business.
• After learning the rules and regulations of the franchise industry, the franchisor prepares various documents such as FDD, franchise agreement and other related materials. Franchise fees and royalty fees are also fixed.
• A separate wing is established to oversee the franchise business for sale offers.
• The franchise businesses for sale offers are circulated in the market. The company may or may not introduce master franchise and area development offers.
• The first batch of people who apply to buy a franchise from the franchisor is screened. The people are selected according to their general business skills and experience. The net-worth of the candidates is also checked. Some franchise opportunities need specific professional training.
• The candidates are given the FDD, so that they can go through the franchise proposal of the company.
• Those who show further interest are called for the Discovery Day. The franchisor and the franchisee can meet for the first time during the course of Discovery Day.
• If the franchisee is interested in starting a franchise with it, the franchise agreement is given for review.
• Sometimes, a new franchisor may even allow some changes made by the franchisee.
• After the signing is over, the training begins. Other supports like real estate selection and leasing, remodeling the location, advertising in the market go on simultaneously.
• Grand opening announces the start of the franchise business.
• The franchisor periodically supervises whether the franchisee is following the rules. If the latter has any problem, it can call up the franchisor any time.
• The franchisee soon starts getting back his investment and another success story is born.





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John Power
John Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website


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Michael Hemenway
(Visit Michael's Website) Founder/CEO of brandEXPANSION the only firm of its kind serving all aspects of franchising. With our industry background and successful franchise units established around the world, we have a time tested strategy to assist you in locating, developing, advertising, marketing and executing the optimal franchisor and franchisee strategy. brandEXPANSION brings over a dozen years of hands on experience in the field. This gives us an insider’s perspective on the business of franchising, which is an invaluable asset in supporting your objectives. We simplify the franchise experience by providing on going consulting and support designed to deliver the most profitable franchise investment you can attain. brandEXPANSION has placed franchise units in over 1000 locations nationwide. This includes the strategy and writing of franchise documents, over 600 franchise real estate locations selected, over 200 construction projects completed and over 250 proven franchise companies currently represented. The company also operates the leading franchise-industry social networking site, http://www.FranchiseUltraLounge.com .

Michael Hemenway is a Platinum author on EvanCarmichael.com
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brandEXPANSION Hot Press - Stay up to date with the latest franchise news and opportunities with Hot Press, brandEXPANSION’s daily news and information website. Our staff of writers are dedicated to helping you make the most of your business and providing you information to make the best decision about which franchise industry is right for you.
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