Helping you set up your Franchise development or Licensing agreements.
This is not the only way to expand and is not for everyone. But, going through
some simple questions may help clarify or develop your options.
Answer these questions:
- Does it have potential for growth in a number of other locations?
Franchising is duplication of something successful in different locations. Does your
business have that potential somewhere else?
2. Is your business profitable? Who wants to be involved in something that will not give a return on investment and or living?
3. Is it unique? Do you have trademarks, intellectual property, patents in place to
protect your services/ products?
4. Does it have a recognisable brand image – logo and name are only part of this.
5. Do you have a good reputation?
6. Does your business have systems documented to staff and others to run successfully without you being there or in different locations?
Identify all the systems that make your business work (and don’t work) Your Franchisees will have the same issues – they are buying a systems that is meant to work!
7. What are the advantages and benefits to prospective business owners?
What is the cost vs benefit? Why will they buy your franchise?
Consider these points for a good working relationship. How they can work well:
a. Systems must cover not just technical but management processes as well.
b. Well matched personalities to role: have clear selection criteria for
prospective franchisee.
c. Skills of Management and resolution conflict, inspiring and motivation for your
franchisees.
Research these documents well:
Know the franchising code of conduct PH 1300 302 021 www.accc.gov.au
Prepare a franchise agreement and operations manual
IP issues IP Australia www.ipaustralia.gov.au
Disputes Office of the Mediation Advisor Ph 1800 150 667
www.mediationadviser.com.au
Setting up a Franchise
You will have to develop the:
Structure of your franchise- type/model/royalty/marketing fees
The Package your franchise offers
What is your ideal franchisees profile – have a selection criteria.
How are you going to recruit franchisees?
How are you going to manage:
Their performance?
Your franchisor/franchisee relationship.
Developing your Operations Manual.
Vision Mission.
Brand use.
Technical information and policies and procedures.
Administration and management policies and procedures.
Staff and Training Manuals.
Marketing Manual:
Your processes for sales, marketing and lead generations.
Use and creation of brand awareness.
Marketing campaigns.
Data base development.
Performance and reporting management.
Measuring and report, auditing.
Monitoring systems.
Source and prepare your Relevant legal requirements:
Licences and registration requirements for business and industry
Franchise Documents
Disclosure Documents
Franchise agreements
Mediations and Dispute resolutions processes
.Business protections – trademarks, patents, IP
.Prepare a brief for your Franchise Agreement.
Service agreement or supply contract
They might be:
Provision of services from one organisation to another
Provision of services from an organisation to a private consumer
Management of services by an organisation or provider on behalf of a client organisation
Direct contracting of services
Sub-contracting of services
Licensing arrangements between two organisations or bodies
Franchising arrangements between a franchisor and franchisee or franchisees
Rental supply of products and/or services by a services provider to clients, either corporations or private individuals
Provision of equipment in conjunction with leasing or other financing arrangements and other types of supply agreements and commercial trading arrangements
Service agreement or supply contract – basic structure might include:
1. Heading/title
2. Description/purpose/the service (basically the product/service description)
3. Parties (supplier and client – including addresses)
4. Date
5. Territory/geographical coverage
6. Definitions – essential glossary ‘root’ of frequently occurring items in the document
7. Term – period of agreement
8. Pricing (refer if appropriate to attached schedule)
9. Pricing adjustment (for example annual increases linked to suitable index)
10. Responsibilities of provider – include or append details of services and SLA’s (service
level agreements)
11. Responsibilities of client
12. Payment terms
13. Confidentiality
14. Dispute and arbitration /mediation process
15. Termination, breaches and force dissolving of agreement.
16. Renegotiation/renewal
17. Prevailing laws, licences required etc.
18. Signatures and witnesses
Refer also to SBIS 04 Decision making SBIS 603 F in M Identifying financial needs.
SBIS 727 Situational Analysis
