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THE FRANCHISOR START-UP

Franchising is an exciting, complex, and fun method of doing business.  There are, however, some specific guidelines which should be followed to develop a strong and successful franchise system.  The basic steps for a quick franchise start-up may be placed into three classifications:

(1) operations (including Manual) 

                           (2) marketing, (including Brochure)

                           (3) legal (Including UFOC and         contract). 

A successful franchising program will include the development of the operational systems, the marketing programs, and satisfy the legal requirements necessitated by federal and state laws.

 Operations

The franchising system is designed to replicate a successful business opportunity.  This generally means that the franchisor has developed extensive operation techniques and is able to provide an operations manual explaining these techniques and functions to the new franchisee.  You need to be able to understand how to put together the various operations of both a prospective franchisee's business as well as the operations of the franchisor's headquarters establishment. 

The success of franchising has been based primarily upon the ability to satisfy customer wants and needs.  This is generally done through successful store operations. 

You need to investigate those operations including planning; development of the franchise or business plan; evaluation; analysis and development of management and operations; and establishment and analysis of the financial aspects of the franchisor business.

 Marketing

One of the most amazing aspects of franchising is the development of a correct marketing program and system.  The franchise headquarter's organization is basically divided into two major sections: (1) operations, and (2) sales/marketing. 

The marketing aspects of developing a strong franchisor organization includes understanding that there are two primary target markets for the franchisor including: 

(1) the prospective franchisee, and 

(2) the end consumer.  

The franchisor needs to develop marketing programs, advertising, sales promotions, and public relations aimed at soliciting prospective franchisees.  The franchisor will need to develop a sales management team that sells specifically to prospective franchisees. 

The franchisor will also need to develop the marketing and advertising necessary to promote the products and services to the end consumer.  The advertising and promotion will bring the customers in the first time but it is the operations which will bring the customers back for repeat business. 

 Legal

The franchisor needs to be aware of the legal requirements necessary to establish a franchise.  There exists both federal and state laws which the franchisor should be aware of and adhere to in the development of their franchising programs.  The franchisor will develop a Uniform Franchise Offering Circular (UFOC) as well as a franchise agreement or contract for the franchisee. 

The franchisor will do best to work with outside legal counsel who are experts in the field of franchising.  This outside counsel will help franchisors develop their programs in compliance with franchise laws, rules, and regulations.  There are certain do's and don'ts which will enhance the franchising opportunity for franchisors if they understand the legal requirements necessary to start and correctly operate an ongoing franchising system.