WHAT IS A FRANCHISEE?

A franchisee or franchise partner is an independent entrepreneur who has received the franchise, that is, a kind of license to use an existing business concept from the franchisor. The franchisee is an independent and legally independent entrepreneur.

HOW DO I BECOME A FRANCHISEE?

If you want to become a franchisee, you should inform yourself well in advance, because as a partner in a franchise system you are an independent entrepreneur - with all rights and obligations. You should also consider the field in which you would like to be self-employed. Is gastronomy more of a system or more of a craft? There are many ways to find the right franchise system: online portals franciza.org.ro, the national franchise register etc. 

enlightenedÎin any case, you should ask yourself the central question beforehand: “Am I a franchise guy or would I rather be successful as an independent entrepreneur?”.< /strong>

WHY BECOME A FRANCHISEE?

If you are thinking about self-employment, you should definitely think about franchising, because this form of entrepreneurship offers many advantages that a free office does not have.

Benefits for franchisees:

  • Existing franchise concept allows quick market entry
  • The business idea has already been tested and therefore the start-up risk is minimized
  • The system provider already offers a mature marketing strategy
  • Franchise systems usually offer special conditions and purchasing advantages that benefit all franchisees
  • The mature and tested business idea also improves the negotiating position on financing issues
  • The franchisee can focus on his core competencies, customer contact, on site. The franchisor handles further development, marketing and control.
WHAT SHOULD BE CONSIDERED WHEN CHOOSING A FRANCHISE SYSTEM?

 In addition to economic success, the mood within the company and the fluctuation of franchise partners must also be taken into account.

WHAT QUESTIONS SHOULD POTENTIAL FRANCHISEES ASK THE FRANCHISOR?

  • Anyone who has shortlisted a system should seek a detailed discussion with the franchisor. The most important questions for such a conversation concern, among others, the figures, the franchise package with its services, the location, the financing and the franchise agreement. The Romanian Franchise Association recommends a practical questionnaire to franchise founders:
  • What advantages / strengths does the system have on the market, in sales and purchases?
  • Are the numbers correct?
  • What is the franchisor's current situation?
  • Is the franchise package “waterproof”?
  • Location and financing?
  • Other important points of the contract.
WHAT RIGHTS AND OBLIGATIONS DOES A FRANCHISEE HAVE?

Franchisees have the right to:

  • receiving a proven system with a positive image and clear competitive advantages.
  • receiving the system manual by the franchisor. The manual contains the know-how and all the necessary information for operational management.
  • comprehensive support and qualified advice from the franchisor.
  • long-term education and training.
  • advertising and promotion activities.


Franchisees have the obligation:

  • to respect the principles of the system established in the manual.
  • to work with the system administrator.
  • participation in seminars and training courses.
  • carries out regional advertising and promotion activities.
  • pay the franchise fees.
  • to inform the franchisor about the developments of the company.
  • promote and maintain clean brand identity.

WHERE DOES THE FRANCISOR SUPPORT THE FRANCHISEE?

From the very beginning, franchisees receive support from the franchisor on the way to self-employment. This helps with many benefits and services to promote franchisee success. Even after successful establishment, the franchisee is continuously supported by the system headquarters. The services that franchise systems usually provide:

Location Search

The franchisor supports the franchisee in finding a suitable location, important for image and sales. On-site assistance by the franchisor is often a standard service that is contractually agreed and is usually compensated with the entrance fee.

Help with setup and startup when opening a business

The furniture concept is often provided by the franchisor, who also monitors compliance. The uniform endowment of companies is of the utmost importance for the brand image of the system, as it significantly promotes the value of recognition for the customer.

Favourable purchase conditions

Due to its market position, the franchisor can negotiate favorable terms with suppliers for major customers. This also applies to the franchisee connected to that system. Some systems also offer a cargo management system.

Advertising

Advertising aims to market the system's product or service and raise awareness of it. The franchisor is responsible for the development of the advertising concept, the advertising materials to be used and the national media advertising, which reinforces the uniform appearance of the system in the market. The advertising fee to be paid by the franchisee for this service is usually stipulated in the franchise agreement. The advertising fee is managed by the franchise system in trust in an advertising fund. Usually, the franchisee undertakes regional advertising and implements the existing concept on site.

Training and mentoring

Comprehensive training of the franchisee usually begins before the contract is signed, when the future franchisee is familiar with the system. This initial training ensures a successful start in business. Many systems have their own training centers where partners receive continuous training. Îin continuation of the partnership, periodic continuous training contributes to the long-term success of the franchisee.

IT System

Many systems have an IT system specially adapted to the franchise system, which is made available to the franchisee. This enables system-specific tasks to be processed and makes it easier for the franchisee to manage their tasks in organization, accounting, control and other areas.

Financial Aid

As a rule, the franchisor presents the financing, liquidity and profitability plan to the franchisee as a basis for calculation. These documents also serve as proof of the concept's eligibility for financing as a bank deposit. Other financing options the franchisor may offer include loans, rent subsidies, vendor/trade credit, and tiered or continuous entry fees.

WHAT LEGAL FORM DO FRANCHISEES HAVE?

Which legal form is chosen as a franchisee depends primarily on the entrepreneurial goals of the founder, after all he is a legally independent entrepreneur. From this point of view, you can freely choose between the usual legal forms under Romanian company law. This also applies to the establishment of a franchise. Î depending on the system and its own status, the franchisee can act as a sole proprietor or choose from the usual corporate forms. Tax or liability criteria should not be the only deciding factor here; the individual aspects of the business must also be taken into account. In any case, it makes sense to seek professional advice before setting up a franchise.

WHAT DOES A FRANCHISE KNOW?

Of course, considering whether self-employment in the franchise makes sense and the question of possible earnings also matches personal requirements. An important question, because in the end it is not enough to be your own boss. You have to be able to make a good living out of it. How well depends largely on the choice of system, location and number of locations, industry, individual fee structure and, last but not least, your own qualifications. Therefore, it should be calculated accurately and realistically. One thing is certain: the franchise partnership must be useful for both the franchisor and the franchisee.