Category: Franchise Development

Mark Siebert's recent article The Dangers of Do-It-Yourself Franchising is a MUST read for anyone thinking of franchising their business. His basic premise which I completely agree with is that if you want your franchise program to succeed, you'll need some outside help. Sure it's a bit self serving for me to say this but considering the price of getting it wrong (poor franchisee performance, lawsuits, bankruptcy, etc), it is completely worth it to pay upfront for some expert advice.

The franchisor's intellectual property is the heart of the franchise. This is what is being sold. Without the "Big Idea" the franchise is nothing, it is the biggest asset the business has. Thus the franchisor needs to take careful steps to protect their IP and ensure that others know it belongs to them.

The fundamental items that can be registered as IP are:

• The name of the company or business. This must be registered before the franchise can be marketed. Make sure that no one else uses this or similar names.


• Trade Marks. These are symbols that identify the business. They can be a logo, letter, shape, image, brand, package design, caricature, photograph, process and many other things. Registering a trademark prevents others from using it without a licence. The trade mark should be registered in all geographic that the franchise will operate in.


• Domain Names. These should be registered as soon as possible to forestall any hijack attempts.


• Copyright. All published written materials should be marked as copyrighted; this is particularly true of the Operations Manual.


• Patents and Designs. If the franchise depends on a particular invention or design then this should be legally patented. The franchise agreement should reflect this by terminating the right of use if the franchisee ends their relationship with the franchise.

Every franchise needs an Operations Manual. It is the Bible that the franchisees will follow closely, step by step, to set up and operate their business. Franchisees should be required to follow the format set out in the Operations Manual.

The Operations Manual must be well put together so that it makes setting up a franchise as smooth and problem free as possible as well as being easy to read, understand and use. It should be a document which is comprehensive and cover every contingency that may crop up in the course of doing business.

The more thorough the Operations Manual the less time and energy the franchisor will need to invest in helping the franchisees.

All aspects of conducting business need to be spelled out including:

• The obligations of the franchisee


• Setting prices


• Advertising techniques and issues. Includes content media and use of brand imagery.


• Stock control


• Ownership, leasing and maintenance of equipment.


• Administrative and accounting practices


• Sales methods


• Service delivery and timing


• Security


• Record keeping


• Company image guidelines


• Staff and subcontractors


• Management structure


• Customer complaint protocols


• Standards and specifications


• Performance criteria


• Performance measurement


• Procedures for setting up the business

Anyone thinking of franchising their business needs to take a thorough look at their own capabilities, goals, resources and personal drive to see this ambition through. Questions to ask:

1. What are my goals? Are they realistic?
2. How much money do I have, how much do I need and where do I get it if I need it?
3. Do I have the patience, drive and ambition to build a franchise?
4. How are my people skills? Franchisors need to work well with people in a relationship of trust that will a lot of money.
5. Can I work well with a variety of different personalities?
6. How will my family react to the extra time taken to work on building the franchise instead of being with them?
7. How much control and independence can I give to franchisees?
8. Can I be a leader? Can I inspire others? Can I make people want to work with me, trust me and look to me when they need help and guidance?
9. Can I communicate clearly to people what I want them to do, train them and manage them?