Intro To Franchising – The Role Of The Franchisor

What is a franchisor? A franchisor is an individual who awards franchises in specific area’s to operate a business using an established system. The franchisor has many roles in ensuring the success of the franchise.

A franchisor’s responsibilities include:

1. Develop a system that works, is simple to follow, and profitable. A franchise system must be able to put anyone in the franchisee and operate the system without getting too technical. If a franchisee finds it is too difficult to follow the franchise system, the franchisee will not be very successful.

2. Ensure that the system is updated on a regular basis to keep up-to-date with the competition, technology, and economic changes. Changes are constantly happening in our economy. The franchisor must continually keep abreast of any new ideas or the competition will gain market share.

3. Making sure that franchisees follow the system. After all, the developed system worked for the franchsior, and is designed to work for all franchisees. If a franchisee does not follow the system, it must be dealt with immediately. Harm may come to the brand if rogue franchisees begin to do things their own way.

4. Provide leadership. The franchisor has been there, done that. It is up to the franchisor to pass on the knowledge and experience to the franchisee to ensure the success of the franchisee, and to the entire system. It is similar to a parent/child relationship where the parent must provide the child with guidance that the child needs to grow up to be a responsible adult. The franchisor/franchisee relationship is no different. The franchisee seeks guidance from the franchisor to ensure success in the business.

5. Build a brand. Branding is what will make the franchise system stand out. Will the customer think of your brand when it comes to a service or product? Will the brand be recognizable in the franchise system? The brand must be consistent, repetitive, and performing, otherwise, advertising dollars will be wasted since the customer will not have confidence in the brand. If the brand suffers, the entire franchise system suffers

6. Award franchises to qualified individuals. Franchise’s can not just be sold, they must be awarded to qualified individuals who have the qualities to ensure the success of the system. People may have the capital to operate their own business, but may not have the qualifications to follow an established system, which is what a franchise is all about. Does the franchisee have the same vision as the franchisor? Will the franchisee put in the time and effort to ensure the success of their franchise unit? This is the responsibility of the franchisor.

7. Communicate with the franchisees. Communication is THE most important aspect of the relationship between the franchisee and franchisor. Is the franchisor good at communication their ideas? Is the franchisor good at updating the franchisee with new ideas, marketing, or updating the franchise manual? Communication goes hand in hand with customer service. It holds the same values. If you do not have good customer service skills, you probably do not have good communication skills. Without communications skills, the franchise system will not survive.

It is vital that the franchisor play all the above roles in establishing a strong franchise brand. This will start with the first franchisee as well as the 100th franchisee.

Next – The role of the franchisee.

Jonathan Bergstein