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franchise.co.nz – PUTTING PEOPLE IN BUSINESS
esponsible Franchising is an International Franchise Association
(IFA) concept to promote good franchising practices. I first heard it at
an IFA Convention and World Franchise Council meeting in 2023.
The practices, directed at established franchised networks, include:
1. Setting clear goals and expectations during pre-sale period so
franchisors and franchisees are aligned in the long-term.
2. Connecting prospective franchisees with the right opportunity through
due diligence and validation of all parties in a franchise sales process.
3. Ensuring franchisors and franchisees commit to their respective
operational obligations to protect the brand and a franchisee’s equity.
4. Focusing collectively on driving unit economics and profitability for all.
5. Embracing collaboration among the franchisor and franchisees
through open communications with franchise advisory councils and
independent franchisee associations when modifying standards to
respond to changing market forces and consumer preferences.
Adopting these practices will foster better long-term outcomes.
Preparations for Responsible Franchising
Responsible Franchising should start when companies franchise
a business, by franchising responsibly. The first critical step is a
comprehensive franchising feasibility study assessing the business,
defining the franchising structure, and evaluating it financially from a
franchisee and franchisor perspective.
Further investment in planning, systems, manuals and executive training
lays further foundations for ongoing responsible franchising practices.
How franchising responsibly helps
A strong franchising feasibility study, implementation plan, legal and
franchise manual development enables communication of a clear business
model, investment and franchise support expectations to potential
franchisees. This helps ensure clear franchisee-franchisor alignment pre-
sale and clarifies attributes needed by future franchisees, providing better
targeting and validation for appropriately matched franchisees.
Initial franchise system development will create clarity on what franchisees
and franchisor need to do. Ensuring this is codified in agreements, manuals
and management practices will strongly support operational obligations to
protect the brand, franchisee and franchisor equity.
Strong franchise system development includes great focus on unit-level
economics, and franchisor economics – including how to work with
franchisees to plan and support their profit and investment returns.
This is an important, nuanced area requiring great franchisor knowledge
and leadership.
Strong system development sets a base for effective communication,
collaboration and change management – a crucial yet typically challenging
area for franchise systems.
Final thoughts
Franchising companies are better prepared to run a franchise system by
franchising their business responsibly at the outset, creating a
base for Responsible
Franchising practices.
Multi award-winning Franchize
Consultants has provided
small, medium and multi-
national sized businesses with
franchising structure, strategy
and improvement advice for
over 35 years.
Franchize Consultants’ Dr Callum
Floyd talks franchising, responsibly.
RESPONSIBLE
FRANCHISING
Franchise Management
Franchize Consultants
www.franchize.co.nz
Contact
Dr Callum Floyd
09 523 3858
021 669 519
callum@franchize.co.nz
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longest established, largest and most award
winning team. Work with a company engaged on
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emerging names in the franchise sector.
Call Dr Callum Floyd 09 523 3858 or email
callum@franchize.co.nz www.franchize.co.nz
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