IIE ENTR112 MANUAL 2013 STEPS IN DEVELOPING A FRANCHISE SYSTEM

IIE ENTR112 MANUAL 2013

STEPS IN DEVELOPING A FRANCHISE SYSTEM


STEP1Establish whether the business is suitable for Franchising

Set out the concept and weigh it up against each criterion.


STEP 2Draw up a Business Plan or Feasibility Study

Determine whether the firm will:

Be able to administer the franchising system properly

Be able to support franchisees with administration functions

Benefit more through franchising than operating a separate, independent business.


STEP 3

Establish a Pilot Operation

Setting up a business

Test the market and operation

The outlet must be open for at least one year


STEP 4

Develop the Franchise Package

The package covers:

Franchise marketing kit

Training programme and facilities

Operation and procedures manual

Start-up assistance


STEP 5

Develop the Manual and Agreement

The following must be developed:

Operations manual

Training manual

Franchise agreement


STEP 6

Meet all the Ethical Requirements

Prepare the disclosure document and register with FASA.

FASA Documents


STEP 7

Recruit and select Franchisees

Very few of the mass of initial enquiries end up as suitable franchisees with the capital to invest.

Franchisors must promote their franchises and handle enquiries promptly and in a professional manner.


STEP 8

Train the Franchisees

Developing the training component requires:

Designing and implementing a training unit or function

Establishing a training location

Developing the training programme


STEP 9

Manage the Franchise System

The franchisees normally require the following support:

Initial training to instill confidence

Assistance in setting up the business

Ongoing support, such as market information, product development

and procedures.