A franchisee represents an entity or enterprise that is issued a license to conduct a business in concordance with the commercial label, brand name and executive model of the franchisor. The license is issued by the franchisor. Upon acquiring the franchise, the franchisee is obliged to meet the regulations and rules initiated by the franchisor. Quite often, the franchisee has to pay the existing franchise creator’s remuneration.
Franchising implies a certain system, which enlarges a business, renders services and realizes goods to satisfy the highest client requests. The system comprises of interrelation between the brand holder and local network provider, which elaborately and productively broadens the created business system. The franchisee arranges the necessary payment or enters into an engagement to pay to the franchisor in order to receive or start using the franchise.
In other words, a franchise complies treaty relations between a licensor and a licensee, which allow the licensee to apply for the licensor’s technique of conducting a business in order to render services and realize products under the franchisor’s service brand, or to provide, sell and realize goods recognized as the franchisor’s manufacturer mark. In accordance with the law, each franchise represents a license, but not any license represents a franchise.
A franchisee should fulfill 4 main conditions to enable efficient operation of the system that provides a franchise.
First, make sure that every employee has the required training and the franchise is always put together.
Second, advertise the franchise and its confirmed services and goods in compliance with the franchisor’s rules.
Third, secure the franchised trade mark by starting the franchise in strict accordance with the system standard specifications.
Four, create a trustworthy and devoted clientele by providing solely confirmed products and by rendering high-quality client service.
Characteristics of an Efficient Franchisee
Being the franchise’s administrator, the franchisee will have to perform diverse roles while using the issued franchise. The franchisor specifies the trademark regulations, but is not liable for the franchisee’s business activity. That is why a successful franchisee should learn new skills to achieve better results.
The franchisee should meet all the system requirements. These might include the usage of certain marketing materials, the list of suppliers to deal with or even the number and list of services and products that can be provided. In such a way, together with the licensing rights and limitations concerning the usage of the franchisor’s item of intellectual property, the franchisee invests in the system. As a payback for the working system, the franchisee needs to announce about its sales and expenditures, comply with the guidelines related to the way of displaying the goods and rendering the services along with the promotional regulations. The franchisee is obliged to follow the franchisors’ protocols on a day-by-day basis. In the event of failure, the franchisee risks to break the franchise contract rules.
A corporate manager who is willing to become a franchisee comprehends the interested business sphere, is aware of how to operate within the framework of the established system, finds different ways to stimulate the personnel and is ready to work hard in a long term. However, a franchisee is mainly a small business holder and it implies no internal assistance service, expenditure accounts, payable sick leaves and no retirement or health insurance schemes as in a larger enterprise.
The franchisee’ success depends on the franchise’s daily activity. Which is why an insightful franchised system will offer a high-level assistance in achieving an efficient franchise.