Who is a Franchisor?

The method of franchising has been increasing in popularity in the last few years thanks to its benefits. Both sides of the deal benefit greatly from franchising a business.

The franchising business sells the right to use its intellectual property, expertise, and its brand to someone else for a certain fee.

Because of this, the side that gets the intellectual property rights can scale up much faster than building a business from scratch.

In addition, the side that franchises their business, also known as the franchisor, gets the benefit of another branch totally run by someone else without much trouble and gets profit from it.

This article will show who the franchisors are, what they do, and other details.

Who is a Franchisor
Who is a Franchisor?

Who Is A Franchisor?

In simplest terms, a franchisor is a business or the person that sells the right to open stores under the brand they own and also sells their intellectual property and expertise.

This means that the franchisor is the original business that is selling the name and the ideas of the brand itself for others to use.

They maintain the rules of the brand and can make any change they’d like to the franchise stores.

They sell the name of their business to expand their network as fast as possible and learn about the local market.

Franchisors have rules for the franchisee, the person buying the rights, to obey to make sure that the brand is the same everywhere else. 

Read: What Is Liquid Capital For A Franchise?


What Does A Franchisor Do?

A franchisor’s main aim is to ensure that the franchise business is doing well and that franchised branches also obey the brand’s rules.

Ensure that everything moves smoothly and change the rules or standards of all franchises depending on the situation. Here are some of their responsibilities:

Selecting the right individuals to sell the brand’s name

The most important thing for the success of a franchised branch is how well they follow the standards of the original business.

That’s why franchisors focus on selecting qualified people who can understand your brand’s concept and follow the rules.

Once they select the people, they also make sure that their rules and standards are all the same across all locations.

  1. Constant leadership

Being a franchisor is not just selling the rights to an individual and letting them play the game.

You are basically the boss of all franchised branches, and this means you must always provide the necessary leadership to move the branch and the business forward.

You are in charge of the standards, working environment, staff, training, and all the other important franchise things you would like to have.

2. Protecting brand standards

If a franchise’s all locations have different branding, service, training, employees, and service, the brand will lose its touch because the customer can’t trust it.

The main point of a franchise is that it is consistent and all the same everywhere, creating a trusting relationship.

Franchisors make sure that the brand standards are met and that it resonates with its customer audience.

3. Ensuring quality marketing

To make a franchise successful, you have to have a quality marketing standard that will aim to promote and legally protect your license and trademarks.

You have to establish a certain quality standard for whatever it is you are offering and that it can do the same in every location.

A franchisor handles all the marketing campaigns and follows all the necessary things to ensure all franchised locations can benefit from it.


The Benefits Of Being A Franchisor

Being a franchisor might be a lot of work and requires effort to maintain a quality standard, but all that comes with its benefits.

When you are a franchisor, you have a massive expansion opportunity, scale fast, increase your market share and create an additional revenue resource.

These benefits are the pillars of a business’s success, and the franchisor gets all of them just by franchising.

You get to have locations all across the country without maintaining them all the time.

A franchising business can scale the brand on a national or a regional growth level easily because you have a location there.

Your market share will also increase with increased customer numbers and bring you more income.


How Do You Become A Franchisor?

Becoming a franchisor is mentally and financially extremely hard, mostly because of all the responsibility it brings, and starting a franchise brand costs quite a lot of money.

That is why there are certain steps to becoming a franchisor if you think it makes sense for you.

Here are those steps:

  • First, see if franchising makes sense for your business and for you,
  • Create manuals and processes, and ensure the business processes are all organized,
  • Get in touch with a lawyer who specializes in franchises,
  • Take your time choosing the franchisees and ensure to learn everything about them before making a decision,
  • Always follow your brand’s current situation in your franchised locations and enforce your guidelines.

Even though there aren’t many steps to cover for becoming a franchisor, most of these steps require a lot of time for thinking, researching, and finding the right people.

The most important part of becoming a franchisor is to find the right people to represent your brand and set your brand guidelines.

If you can manage these two, then you are more than ready to become a franchisor.

Read: What Is A Restriction In A Franchise Business?


The Verdict

Franchising in itself is a lot of work with a complicated network, but franchising also comes with a lot of benefits for the franchise owner, which is known as the franchisor.

The franchisor does all the work to ensure that the brand’s standards are the same everywhere and develops standards and guidelines for franchise branches to follow.

If you decide to become a franchisor, you have to spend a lot of time making the right decisions and finding the right people to sell your brand name.

If you think you can handle this, being a franchisor comes with benefits that you can’t have anywhere else.

Sources

https://www.investopedia.com/terms/f/franchiser.asp

https://www.franchise.org/faqs/basics/what-is-a-franchisor

https://www.indeed.com/hire/c/info/definition-franchisor

https://www.accountingtools.com/articles/franchisor

https://www.pointfranchise.co.uk/articles/franchisor-definition-4/

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