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How Much Support Are Franchisors Required to Provide Franchisees?

Franchising is a business model that has been around for many years and continues to grow in popularity. Franchises provide a business owner with the opportunity to own and operate their own business, while also receiving support from the franchisor, in the form of training and support. However, support varies widely from franchisor to franchisor. Some provide extensive support while others offer very little assistance. Support provided during the startup phase is often critical to the success of a new franchise, and as such, it is important to understand what type of support franchisors often provide and what level of support should be expected by a new franchisee.

Importance of the Franchise Agreement

The hard-and-fast answer to the question is that franchisors are only required to provide as much support as is guaranteed by the franchise agreement. Support provided to new franchisees varies depending on the franchise system and the stage of development of the franchise, and so early-stage franchises generally offer less support than established franchises because they are still in the process of growing and developing their brands. Established franchises typically offer more support and are more likely to have processes in place to assist with the day-to-day operations and startup of a new franchise location. As a franchisee progresses through the various stages of growth, they are generally expected to take on more responsibility and receive additional training from the franchisor. This is designed to ensure that the franchisee has the necessary skills to successfully operate their business and manage all aspects of operations.

Outlining a Support Structure

To provide adequate support to new franchisees, franchisors should create clear and well-defined systems that outline the various levels of support and the steps required as each franchise develops. This will prevent confusion and help ensure that each franchisee receives the support they need in order to successfully grow their business. It will also help to prevent major issues that could arise if support is not clearly outlined from the beginning.

Franchisors should also establish policies and procedures that provide guidance and training to new franchisees. These policies should outline the types of support available to the franchisee at each stage of growth so that franchisees know what to expect, and help to ensure compliance with the standards and procedures set forth in the franchise agreement.

Success Found in Support

The key to success for a franchisor is to ensure that their franchisees are successful and profitable. To support this goal, most franchisors offer a variety of services and support to their franchisees. These services may include on-site training, on-site marketing assistance, assistance with staffing, quality assurance programs, market research, or any other services relevant to the business. Each of these services is designed to benefit the franchisee and helps to establish a strong relationship between the franchisor and the franchisee.

Franchisees also benefit from the network of resources provided by the franchisor. Many franchisors have extensive networks of partners that can help provide products and services to the franchisee at a reduced cost or at no cost at all. For example, many restaurants that offer a franchise option have partnerships with vendors that provide discounted food supplies or equipment at a discounted cost for the franchise locations. This helps to keep the costs down for the franchisee while still providing products at affordable prices. Networks such as these can make the startup and development phases of a new franchise much less stressful, and help a franchise grow without the pains of setting up all the systems necessary for operation on their own – but aren’t necessarily required by the franchisee unless specified in the franchise agreement.

 

Franchising isn’t always easy. Like any new business, there are inevitably challenges that will arise along the way. The assistance of a qualified business law team can always help to alleviate some of the stress and potential pitfalls associated with the early stages of a franchised business. Contact TLF Business Attorneys today at (305) 985-4571 for further information or assistance with your own franchise development.

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