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Management Competency
Ensure whether the existing management (the franchisee)
has adequate capabilities and staff to manage the growth of
the franchise system
FRANCHISEES are appointed to become the integral part
of the franchise system
2. Competitors’ Analysis
Competition on both at the franchise level and also at the
consumer level
3. Conflict Management
Anticipate probable source of conflicts between the franchisor and the
franchisees and devise strategies to resolve them
Source of Conflicts
1. Inadequate support from the franchisor
2. The franchisees are not behaving the way they are supposed to as per
the rules of the franchise system
3. Revenue sharing
4. Inability to fulfill the commitments made before entering the
contract
4. Economic Impact
Impact of investments, cash flows and profits of both the franchisor
and the franchisees
5. Financing Requirements
Whether the kind of investment the franchise system
requires shall be fulfilled by a potential franchisee
Alternate sources of finance
Possibility of making institutional arrangements with
finance companies that can provide finance to the
potential franchisees on the recommendations of the
franchisor
6. Exit Strategies
An exit clause
Modality to terminate the agreement
For the unviability of the franchisee or unsuitability at
a later stage
In the case of disputes, the legal recourse available to
the franchisee or the franchisor must be articulated in
the franchise agreement
7. Marketing Strategy
Pertaining to:
Site selection and development
Operating standards
Financial management
Sales and marketing
Usage of trademark
12. Support Mechanism
Documented procedures for providing support to the franchisees
Includes:
Office support
Field support
Ongoing visits
Contact reports
Market research support
Motivation programmes
Franchise relation programmes
Communications