Why should you become a franchisor?

How can a successful franchise business be multiplied?

The transferability of a franchise system and the ability to pass on the know-how specific to the system have their own commercial value, if they can be made available to third parties in the form of a performance package. In recent times management systems have been developed with the intention of marketing them through franchising. Franchise systems normally go through several stages of development:

  • Organisation System
    Each company develops, either intentionally or unintentionally, its own organisation system to produce goods or to offer services. This term means that different structures and methods are combined and integrated, which then serve to coordinate both people and products. In order to ensure an optimal process the single elements must be smoothly integrated and be in tune with each other. The personnel, the prospective customers, the material aids and the company’s concrete offers are the main factors which make up the organisation system. For a business-specific organisation system to be developed, the whole of the performance process must be broken down into separate steps. In conjunction with this a detailed analysis of the division of tasks among the people responsible must be carried out and must be very carefully planned as this has far-reaching effects on the organisation system.

  • Value System
    The value system can particularly be seen in the company philosophy and company culture. If there is general agreement on the value system within a franchise system, then it will influence decisions, conceptions and activities at all levels. Last but not least the value system has a considerable influence on the way the company sees itself in the future. This company vision in turn determines the aims towards which all strategies are oriented. Outside the company the value system has an effect on the image of the franchise system among the public.

  • Management System
    A complete management system can result from the systematic development of the organisation system when comprehensive process factors are included. It is especially important that a value system be added to the organisation system in order to create an ethic basis for the company and to make its moral demands known.

    However, in times of radical economic and technical changes upsets in the inner equilibrium of these sensitive systems must constantly be reckoned with which then require adjustments or even a new management-system structure. The increasing saturation of demand in many areas has led to the customer structure or the performance concept being reconsidered. The handling of new market segments, the integration of new tasks and technical changes can also have drastic effects on the whole of the system. If the management system is carefully adapted and continually developed then it should be able to be used far into the future.

  • Duplication
    The standardisation of the essential elements of a management system makes it possible to build up a homogeneous company. The concentration of the important management functions at the head office as well as the standardisation of the functions in the franchise businesses are decisive factors for building up a strong franchise system. The result of these are rationalisation effects at the head office and in the separate franchise businesses with the possibility of making considerable cost savings through a sensible division of tasks.

    If branches or franchise businesses are to be built up true to the original then the essential elements of the management system must first be identified. It is occasionally the case that some systems are unable to be successfully transferred as a result of their complex interior network. It is essential that these elements can be reproduced by third parties without them being dependent on certain people or environment conditions. The aim must be, therefore, to simplify the system if it is to be duplicated. The identification and simplification of the company functions result in the determination of system-specific norms. The prerequisite for a uniform appearance on the market is the standardisation of the use of the system and this factor cannot be ignored.

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