Franchise Feasibility Studies and Development Strategy
To companies which choose to develop their activities through selling licenses and creating franchising, agency, or distribution systems, we provide assistance in preparation of franchise model and development strategy. The service constitutes a component of a complex franchise package preparation service. Within the service’s framework, together with the interested company, we take decisions concerning all suspects of planned development through franchising.
To those which are already in the process of franchise network development, we offer verification of the franchise model and developmental strategy applied. Within the framework of that service, we – together with the client – decide on the planned scope of the franchisor’s and its franchisees activity, on the potential and the importance of particular geographical markets, and on the order and method of entering the markets.
Drafting Franchise Agreement
A franchising agreement is the final product of the entire process of franchise offer preparation, a bracket containing all the components of a franchising package offered by a franchisor. The contract describes the business model of a franchisor’s operation and its know-how, so, logically, it should be developed as one of the final elements of a franchising package.
It would be wrong to assume that adaptation of a commonly available model of a franchising contract, conducted by the franchisor or their legal advisor, is sufficient. It is characteristic of such models that they only contain general descriptions of some issues that should be addressed and regulated. That is quite understandable since the qualities of franchising which are unique and specific i.e. the fact that franchising systems operate in practically all industries, make it impossible to develop one universal model of a franchising contract.
The ARSS team have years of experience of franchising, agency, and distribution contracts preparation and verification, gathered both on the Polish market and in international transactions. Andrzej Krawczyk, ARSS Founding Partner, cooperates with leading foreign experts on franchising law. That is why, entrusting us with the construction of an entire franchising system or with the preparation of a franchising contract for an already existing system, the client can be certain they will receive a highest quality tailor-made product providing for both Polish and international standards.
Development of the Operational Manual
The operational manual contains the entire franchisor’s know-how that is made available to franchisees. Thanks to our experience gathered while preparing numerous operational manuals for franchisors from various areas of activity, we are able to effectively and quickly identify all important elements which should be included in a complete operational manual. However, a manual’s completion is frequently a laborious process that requires active involvement of the franchisor who is the best source of reliable and detailed information about its unique know-how that has been tested in practice.
As has already been mentioned, a franchising agreement is a bracket containing all the components of a franchise system. An operational manual, on the other hand, constitutes the system’s backbone which contains the entire franchisor’s know-how that he makes available to franchisees. That is why the role of a competently and expertly prepared operational manual is crucial for the franchise system’s construction and must not be underestimated.
The functions of an operational manual are twofold. First of all, it contains a register of all rules and procedures on which the franchisees should operate within the system’s framework. So, usually, it is an extensive document containing detailed descriptions of all aspects of the franchisor’s activity. On the other hand, thanks to its very detailed character, an operational manual should provide the franchisor with appropriate protection of its conception of activity, know-how and trade secrets.
The comprehensive service of preparation of the franchise package offered by a franchisor includes, among other things, the preparation of a financial model of the franchising system being created. The model includes the following:
– the financial model of the franchisor’s company,
– the financial model of a typical franchise outlet.
The development of a franchise system’s financial model is based on experience and data acquired as a result of observation of pilot outlets run by the franchisor. After that data has been gathered and analyzed, and after the franchise system’s financial model has been developed, crucial questions can be answered concerning investment decisions such as the following:
– how long, for the franchisor’s company, should be the period of return of investment necessary for the system’s creation,
– how long, for the franchisee, should be the period of return of investment necessary for the creation of a franchise outlet,
– what amounts of money should the franchisor and the franchisee have at their disposal in order to be able to implement the planned investments,
– what can be the possible sources of financing necessary for the franchisor and for the franchisee, when should the resources be acquired in order to finance particular stages of a development.
The service is targeted at companies which are planning franchise development – both those that are just beginning their activity, and the established ones. The service’s main advantage are diversified techniques which we employ, as well as adaptation of verification and recruitment methods to franchisor’s individual needs. Internet portal or press advertising often appear to be too passive methods of lead generation. Experience shows that reaching the proper candidates directly is frequently cheaper and generates better results than waiting for a potential partner to find the franchise offer by themselves.
Thorough examination of candidates’ qualifications increases the possibility of fruitful cooperation and includes:
– recognizing the needs and specific character of the franchisor’s business concept,
– developing the profile of a “model franchisee”,
– preparation of lead generation strategy,
– conducting the planned actions.
Development of franchise network and support of franchisees
Within the framework of this service we offer newly created franchise systems expert and practical support in solving problems that may arise while creating a franchise system and operating it in the initial period of its activity. To established franchisors – we offer expert and practical support in solving problems that have arisen while managing the franchise network. We get involved in our clients’ franchise development hands-on. This ensures that clients fully benefit from our experience and avoid expensive trial-and-error mistakes.