What Makes a Good Franchise System? – Part 2

In the first part of the series, we looked at service packages within the organisation.

In today's section, we focus on the services available to support you in implementing your business operations.

Here you can read the 1st article in this series

Training for Founders

This foundational training is an essential part of every new franchise launch, through which the complete know-how of the system is passed on to new franchise partners. It is based on the so-called franchise manual, in which the franchisor has compiled all of their knowledge. One could also describe the franchise manual as an operating guide for the system. Products, processes and/or services, as well as the company philosophy, are all documented within it.

The founder training can last several weeks or even months, depending on the scope of the manual. You will only receive the manual itself after signing the contract. However, you are welcome to ask questions during preliminary discussions and gather initial information in that regard.

In-house Training & Development

As a franchisee, you are entitled to expect not only comprehensive training at the start of your self-employment, but also ongoing development opportunities for both yourself and your employees.

The offerings range from subject-specific topics and business management education through to personalised sales training.

Before signing any contract, make sure to enquire about the depth and quality of the training programme, so that you can be confident of acquiring the necessary skills through the system — should you not already possess them.

Networking

Networking among the franchise partners within a system is not merely desirable – it is essential to the system's growth. At least once a year, and often several times, franchise partners come together to share their experiences and strategies, learn from mistakes, and ultimately accelerate their growth.

Such meetings can take the form of dedicated conferences, but may also arise organically and informally at other events such as training sessions. Gather information on this during your initial conversations. How does the franchisor support networking among partners? How many times a year will you have the opportunity to exchange ideas with other business owners in your system?

Caution: Some franchisors are somewhat wary of this kind of exchange. This should be treated as a warning sign.

Partner Manager

Partner consultants or partner managers are the link between the franchise headquarters and the franchisees. They are therefore one of the most important interfaces for effective communication and a successful network. Partner consultants can also be regarded as coaches for the franchise partners.

They focus primarily on three areas:

• emotional resilience,
• the financial situation and financial management of the respective franchise partners,
• support with the day-to-day operations of a business.

Partner managers are closer to the franchisees, knowing more than anyone else at head office about their business as well as their personal matters.

They are experienced professionals within the system themselves, guiding new franchisees from the very start on their path to independence.

Intellectual Property Rights

A key component of franchise service packages is the right to use one or more intellectual property rights. These may include, for example, trademarks, brands, patents, or copyrights. If such rights are referenced during your negotiations, you should ask your prospective contractual partner to provide concrete proof of these rights before signing, as caution is advised wherever the registration of an intellectual property right has not been clearly evidenced.

To prevent franchisees from competing against one another, franchise agreements typically include a clause on territorial protection or customer protection – depending on which makes more sense for the specific offering.

It is advisable to carefully review all intellectual property rights.

Emergency Concept

As a franchisee, you are an independent entrepreneur. But what happens if you are unexpectedly incapacitated and temporarily unable to act?

The so-called emergency concept, or emergency plan, serves to ensure the secure continuation of your business location and prevents a court of protection from appointing a statutory guardian — as is common legal practice. Such a guardian would otherwise be entitled to act in place of the incapacitated business owner and make all decisions on their behalf.

For a reputable franchise system, a plan for the worst-case scenario is an absolute must – without a competent leadership replacement in an emergency, the entire network's existence is at risk.

There is no prescribed structure for what must be included in a franchise service package. Every system takes its own approach here. The services in organisation and implementation that we have outlined here represent what we consider standard — and you should therefore be able to find them in every system.

Click here to go to Part 1 of the series.