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A franchise system consists of an experienced franchisor pitching his business idea to several franchisees for a fee fixed. By definition, this type of distribution system is a cooperative partnership and offers both parties certain advantages: The company founder can use the franchise system to spread his successful business concept geographically. In turn, it is easier for franchisees to set up their own business because they are allowed to adopt a business idea that has already been tried and tested - but still remain independent in terms of from a legal point of view. This also reduces the risk of funding your own freelance work .
The most distinctive feature of such a system is its uniform appearance. The franchisor specifies the way in which the entire system must present itself on the market and defines the corporate identity. Operational procedures such as management, personnel policy, marketing, sales and control are also largely determined by the founder of the company. It is therefore necessary to standardize the business processes in the franchise system in order to guarantee the uniformity of the brand and thus obtain a high value of recognition among customers. To do this, the business model must be independent of a single person and regional environmental conditions in order to be easily multiplied – at national or even international level.
THE FRANCHISOR AS A MENTOR IN THE FRANCHISE SYSTEM
The basis of this distribution system is the franchise agreement, which applies to each member of the franchise system. It regulates the granting of licenses, rights of use and franchise fees, as well as the amount of the franchisor's participation in the profits of its partners. At the same time, the contract contains the specifications for franchisees, which contribute to the standardization of the brand image. This includes marketing and advertising concepts that have already been developed, as well as requirements for staff training, accounting and regular reporting. Îbefore signing the contract, it is advisable to seek advice and support from a specialist lawyer who will legally review all specifications and conditions.
As part of the concluded contract, however, the franchisor offers its partners not only the tried and tested business idea and the associated usage rights, but also know-how, advice and continuous training. The founder of the company acts as a kind of mentor in the franchise system. Personal support is complemented by the franchisor's handbook, which is an important guide for franchisees in the system. It usually includes detailed instructions with instructions, suggestions and advice on how the business concept can be successfully implemented. It is not unusual for the handbook to provide business guidance with statistics and an overview of the market and competitors.
FRANCHISE SYSTEMS ARE POSSIBLE IN MANY SECTORS
There are approximately 450 different franchise systems in Romania alone. This principle of starting a company can be applied to companies in a wide variety of industries. Most franchise systems can be found in the fast food and retail sectors. Directly behind them - depending on the number of franchise systems - is retail. Many food companies have many years of experience as established franchise systems. Many restaurants have become nationally and internationally known restaurant chains as a franchise system. In the health sector, on the other hand, franchise systems are still quite young. The success of medical practices and wellness offerings as a sales partnership system is not yet predictable. Interested parties can use the Franchise System Search Tool of the Romanian Franchise Association to search a large number of franchise systems in a wide variety of industries and thus find the right franchisor in Romania. To be sure that a business idea can be successfully implemented as a franchise system, the concept should be examined in detail and some research undertaken.
On the one hand, it helps to take a first look at the market situation in which a company is located. This includes the analysis of existing competitors, the market position of the franchisor and partnerships and cooperations with other companies. Considering previous franchisees and the number of locations can also provide information about success and gbut the franchise system. If the company's entire network continues to grow, this is a good sign for a promising future. It is especially important to take a look at the product or service offered. The potential franchisee must be aware that a new and innovative offer must first prove itself in the market. A tried and tested business concept, on the other hand, could become an outdated model in the future. This is where it comes in handy to meet customer needs. In this way, it is possible to estimate whether a business idea is and will remain sustainable. Basically, an offer that meets a basic need ensures long-term customer demand and thus long-term business success.