Checklist Franchise Agreement: Fill & Download for Free

You have to look into the ‘Cell splitting theory for organisations’ of a famous Dutch entrepreneur: Eckart Wintzen.A Dutch friend of mine told me about it, and it’s really interesting. However, most is published in Dutch. In general it is about how organisations can grow up to 50 people, and than split into 2 parts of both 25 people. The new cell will be managed by an experienced manager from the original cell, who is responsible for teaching the staff about the working culture, procedures, best-practices, work methods, etc. This empowered ‘clone’ can grow out to 50 people, where the same splitting will happen.This question can best be answered in a concrete deliverable: a Franchise Agreement for your future Franchisors. You can work it out for all relevant aspects, by using this Franchise Checklist. With the "Franchise" you are about to start, with a proven track record and a successful service, you have to make sure you are owning a strong brand, that can be taught and easily communicated.This Franchise Checklist (for example) can be used in combination with a Franchise Contract and will provide insight into all risks regarding the Franchise terms you are about to provide.

Pros and Cons of FranchisingBy Trish BenedikThere are many reasons to choose franchising as a business model. While each franchise concept has it’s own unique systems and procedures, culture and benefits; there are several pros and cons of franchises that are typical to a majority of concepts. Following are some of the advantages and disadvantages of owning a franchise.ProsBranding – as a franchise, branding is in place and recognizable. This is one of the greatest advantages of a owning a franchise. The branding brings in customers that would otherwise not have noticed an independent business of the same type.Marketing – Marketing and advertising are developed and tested. The franchise can pool their resources to develop quality campaigns and professional advertisements. Keeping up with marketing and advertising can be daunting for an independent business.Proven Systems – Systems and procedures are in place, along with training manuals, and replicable processes.Faster start-up – The franchise has opened multiple units (stores, or service businesses), therefore, they have extensive experience and know what it takes to get the business started up quickly.Financial assistance – franchises have a good track record of success. Therefore, banks are more likely loan to potential franchisees than independent business start-ups. In addition, there are several financial partners that work with the franchises to assist in financing.Management – the management of a franchise system often has many years of experience running franchises, this experience is valuable to franchisees as they share this experience with franchisees and use it to provide services to franchisees.Technology – as technology advances the franchise system needs to update and find ways to improve processes using technology. The cost to update can be shared with all of the franchisees making it more economical than for an independent business.Defined territory – depending upon the franchise, there can be a defined territory. Defined territories are an advantage because they keep other franchises of the same brand from infringing upon your customers.You’re not alone – when you open a franchise, you have the development team of the franchise and other franchisees to turn to for support and advice. This team advantage is valuable as you have someone to turn to who has been there before and can share best practices.CONSIndependence – a franchisee needs to follow the systems and procedures set forth by the franchise agreement. Trying to change things too much will be frowned upon by the franchisor and could result in a loss of the franchise license.Royalties – royalties are fees paid by the franchisee for the use of the licensing, trademarks, and systems set forth in the franchisee agreement. These are typically paid based on gross sales, but sometimes are based on a flat fee or product purchases. Royalties go to the franchisor and allow them to continue their support and improving and promoting the brand.Territory restrictions – as the owner of a franchise with defined territories, there may be times when the franchisee has requests to service customers outside of the territory boundaries.Capital outlay – there is more capital needed in the beginning to open a franchise due to the franchise investment fee. This investment up front with the franchise gives you the rights to use their licenses, trademarks, branding, and systems in your business. The cost is often offset by the support, training, and faster start of the franchise model.Agreement time frame – a franchise agreement is for a certain period of years – often 10 years, but could be more or less. At the end of the 10 years, the franchisee has the option to renew or sell the business depending upon the agreement in place and if the franchisor desires for the franchisee to stay in the system. This can also be an advantage if the franchisee desires to leave the business at the end of the contract.These pros and cons are hardly inclusive of franchising and each individual franchise model will have it’s own variations since they are all different. For a serious franchise contender, the above could be a starting checklist of items to consider when looking at individual franchises. Ask lots of questions, learn about the culture of the organization, talk to several current and past franchisees, and work with professionals such as accountants and a franchise attorney before making your final decision. Working with a franchise consultant to narrow your choices to a good fit will save time and aggravation in addition to providing you with valuable insight in to your search.

When you buy a franchise, you are buying the rights to use the franchises’ trademarks, branding, proprietary systems and procedures for a specified period of time. You would gain the right to use the branding, trademarks, and follow the systems and procedures of a business that has proven success. The branding is a very powerful asset to your business. In other words, you don’t need to reinvent the wheel.No - you will not have full control of the business. You will need to follow the systems and procedures set forth in the franchise disclosure document and by the franchise. This is how the franchise can make sure the franchisees are consistent in their quality of service and products. When you go to a well-known branded franchise, you expect the same quality, service, and products. You expect the stores will look very similar and be managed in a similar way. If someone comes in a wants to change everything and not run things the way the franchise has set-up and had success with - then they can lose their right to use the brand name and the franchise. It’s about consistency and proven systems. Franchises vary in the leeway they give their franchisees and it varies greatly by product sold and franchise. These are questions that you will want to have answered while doing your due diligence and researching the franchise.Factors to consider include: your own goals and expectations, what skills you bring to the business, how much you can invest, how many units the franchise has, how long has the franchise been in business, are they growing in number of units or losing units? There are entire books written on this topic.Following are some Pros and Cons of franchising:Pros and Cons of FranchisingThere are many reasons to choose franchising as a business model. While each franchise concept has it’s own unique systems and procedures, culture and benefits; there are several pros and cons of franchises that are typical to a majority of concepts. Following are some of the advantages and disadvantages of owning a franchise.ProsBranding – as a franchise, branding is in place and recognizable. This is one of the greatest advantages of a owning a franchise. The branding brings in customers that would otherwise not have noticed an independent business of the same type.Marketing – Marketing and advertising are developed and tested. The franchise can pool their resources to develop quality campaigns and professional advertisements. Keeping up with marketing and advertising can be daunting for an independent business.Proven Systems – Systems and procedures are in place, along with training manuals, and replicable processes.Faster start-up – The franchise has opened multiple units (stores, or service businesses), therefore, they have extensive experience and know what it takes to get the business started up quickly.Financial assistance – franchises have a good track record of success. Therefore, banks are more likely loan to potential franchisees than independent business start-ups. In addition, there are several financial partners that work with the franchises to assist in financing.Management – the management of a franchise system often has many years of experience running franchises, this experience is valuable to franchisees as they share this experience with franchisees and use it to provide services to franchisees.Technology – as technology advances the franchise system needs to update and find ways to improve processes using technology. The cost to update can be shared with all of the franchisees making it more economical than for an independent business.Defined territory – depending upon the franchise, there can be defined territories. Defined territories are an advantage because they keep other franchises of the same brand from infringing upon your customers.You’re not alone – when you open a franchise, you have the development team of the franchise and other franchisees to turn to for support and advice. This team advantage is valuable as you have someone to turn to who has been there before and can share best practices.CONSIndependence – a franchisee needs to follow the systems and procedures set forth by the franchise agreement. Trying to change things too much will be frowned upon by the franchisor and could result in a loss of the franchise license.Royalties – royalties are fees paid by the franchisee for the use of the licensing, trademarks, and systems set forth in the franchisee agreement. These are typically paid based on gross sales, but sometimes are based on a flat fee or product purchases. Royalties go to the franchisor and allow them to continue their support and improving and promoting the brand.Territory restrictions – as the owner of a franchise with defined territories, there may be times when the franchisee has requests to service customers outside of the territory boundaries.Capital outlay – there is more capital needed in the beginning to open a franchise due to the franchise investment fee. This investment up front with the franchise gives you the rights to use their licenses, trademarks, branding, and systems in your business. The cost is often offset by the support, training, and faster start of the franchise model.Agreement time frame – a franchise agreement is for a certain period of years – often 10 years, but could be more or less. At the end of the 10 years, the franchisee has the option to renew or sell the business depending upon the agreement in place and if the franchisor desires for the franchisee to stay in the system. This can also be an advantage if the franchisee desires to leave the business at the end of the contract.These pros and cons are hardly inclusive of franchising and each individual franchise model will have it’s own variations since they are all different. For a serious franchise contender, the above could be a starting checklist of items to consider when looking at individual franchises. Ask lots of questions, learn about the culture of the organization, talk to several current and past franchisees, and work with professionals such as accountants and a franchise attorney before making your final decision. Working with a franchise consultant to narrow your choices to a good fit will save time and aggravation in addition to providing you with valuable insight in to your search.For more information please visit our website: https://selectfranchiseconsulting.com