Building Franchise Network

 Expansion
 Involvement
 Rewarding Performance
 Master Franchise
 Building Franchise Network
 Expansion
 Benefits of expansion have to be realized by both
franchisor and franchisees
 Share promotional costs:
 Shared advertisements between franchiser and

franchisee, and between franchisees

 Joint marketing activities

 Common promotional schemes

 Building Franchise Network
 Expansion
 Pool supplies and raw materials
 Centralize recruitment and training
 Product development
 Centralize standard features
 Leave local variation to country specific development
 Building Franchise Network
 Involvement
 Operational matters
 Regular and frequent franchisee and franchisor meets in
different geographical areas
 Get feedback and share experiences from other regions
 Discuss competition to evolve new strategies
 Display fairness to all franchisees
 Keep the policies transparent and standard for all franchisees
 Building Franchise Network
 Involvement
 Tactical Decisions:
 Pertains to annual targets, marketing and promotional
schemes, new product launches etc
 Test marketing needs
 Strategic Decisions:
 Long term in nature, necessarily taken by the franchisor
 To be properly communicated to franchisees
 Building Franchise Network
 Support:
 Identify franchise units which require more than
necessary support
 Enhanced marketing and advertisement support
 Refresher training
 Providing managing support
 Boost the motivation levels of the franchisee
 Building Franchise Network
 Rewarding Performance:
 Formal Awards:
 Select and award franchisees for different types of
performances like sales, ambience, customer satisfaction,
service etc
 Financial incentives:
 Over-target achieved incentive
 Growth incentives
 Do not keep the same type of award as it will be construed as
a part of contract; change the scheme every year
 Building Franchise Network
 Rewarding Performance:
 Multiple Units
 Giving franchisee one few more units to be set up
 Advantage: time saved on franchisee selection and co-
ordination for setting up franchise units
 Disadvantage: Franchisee may spread thin and not able to
give due attention for all his units
 Building Franchise Network
 Master Franchise:
 Awarding territorial rights to a business partner, where
he can further set up franchisees under him
 Master franchisee gets a share of franchisee fees and
royalty
 Master franchisee is required to perform some of the
support and control functions that a franchisor
normally performs
 Master franchise rights are awarded to those who have
achieved success in running their own units
 Building Franchise Network
 Master Franchise:
 A separate master franchise agreement is signed
 Sub-franchisees are short-listed by master franchisee
 Final selection of sub-franchisees rests with franchisor
 Sub-franchisees signs the standard franchisee
agreement with the franchisor
 Master franchisee is not a signatory to the agreement
 Know-how transfer will take place from master
franchisee
 All manuals will be supplied by the franchisor