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Franchising concept

Franchising concept

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Franchising concept

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  1. Franchising concept By Dr. Mohammed Duliem Al-Qahtany Franchise Expert

  2. What is Franchising? • The transfer of Intellectual Property Rights (IPR ) including but not limited to Trademarks and Technical know-how • Provides added value to the business operation between two parties Franchisee and Franchisor

  3. As market entry barriers break down globally … + + Love Marks (Brand) Technical Know-how Economies of Scale = SURVIVAL The Future in Franchising

  4. GLOBAL OVERVIEW • A proven business model • Over 15,000 franchises world wide • Over 80% of the retail offer in Major malls are Franchised (GCC) • Over 75% of Hotels (Worldwide) are franchise operations

  5. What Type ofBusiness Sectors? Health and Beauty Leisure and Travel Motoring Logistics Real Estate Food and Beverage Home Improvements TV and Media services Management Services Fashion and Lifestyle …and more

  6. F R A N C H I S O R Operational benefits to the Franchisor Financial Benefits to the Franchisor • Marketing Power • Brand managers achieve 'first-in-mind' levels of recognition = more bang for • the buck in MARCOMS activity • Market Share • Extended geographical penetration = customers accessibility = brand loyalty • Group Purchasing Strength • Increased volumes + centralized buying = competitive pricing structures • Fast, Effective, Geographical Expansion • Use of the local expertise = better results in a shorter time-frame • Rationalized Central Management • Operating and managing = less demands on core organisation infrastructure • Expand without the risk of high capital expenditure and debt accrual • Capital injections from franchise fees • Cash flow benefits from management service fees–MSF • Less risk of Management Fraud • Lower Human Resource liabilities

  7. F R A N C H I S E E S Financial Benefits to Franchisees Operational Benefits to Franchisees • Lower development costs • Reduced capital expenditure • Quicker ‘payback’ period • Centralised development costs • Power purchasing • Improved NP • A tried and tested business formula • A brand identity • A shortened learning curve • Education and know–how • Network support

  8. Critical Assets - What to look for? • Business management reputation • Financial feasibility • Differentiation • Transfer of know-how • Flexibility • Market trends and conditions • Proven business system • Capital resource • Competent and experienced executiveteam

  9. The Franchise Development Programme • Develop a “System of Critical Assets” required to support and sustain a successful franchise • The “Critical Assets System” covers over 150 aspects of your business • The result will be a fully-pledged franchise operating system

  10. Three Phase Approach

  11. Extracting the DNA • The mission, vision and the core values • The business system definition • The intellectual property protections • The critical financial characteristics and financial models • The market opportunities and constraints • The franchisor investments andreturns • The creative business solutions forsustainable success

  12. Announcing to and Securing the Right Franchisees • The franchise marketing plan • The screening and selection criteria • The franchise information memorandum (FIM) • The franchise agreement (legal contract) • The local business plan • The site search and selection process • The design and installation schedule • The local business launch campaign model

  13. Putting the Theory into Working Practice • The policies and procedures • The operating manuals • The pre-launch training requirements • On-going training and motivation techniques • The franchise administration system • Business development, feedback, audits, troubleshooting

  14. Deliverables Dedicated Franchise Mentors – an extension of your team providing : • Specialist support • The business plan • The marketing tools and strategies • The legal framework • The operating manuals • The management control system

  15. The Timeframe