How does the franchisee know how to operate the business in the way the franchisor wants?
This is why good franchisors will train them in business skills and sales techniques – so they can represent their brand as well as the franchisor has done. Having the know-how of an established and authoritative industry player behind franchisees gives them a major advantage over the start-up operator. To protect the quality and consistency of the products or services associated with the brand, a franchisee also has to sign a legal agreement at the outset. Called a franchise agreement, this stipulates certain practices and standards of behavior they have to adhere to, and sets parameters defining how far they can stray from brand standards, such as décor, food ingredients or opening times – generally not very much. This legal document usually covers a minimum period of around five years.
