Franchising as a means to expansion
Macdonald-Henderson has recently acted for a number of franchisees who have successfully taken on established business formats in central Scotland. Statistically franchise is a growth area and banks tend to be more supportive of businesses - particularly start-ups who are buying into a proven track record. Conversely franchising itself can be used as a relatively low cost means to expansion particularly if you have a distinct brand and a business system and support service which can be packaged. If your business possesses these characteristics then franchising may be a way forward. However before this can be advanced meaningfully considerable development work is required. While you may have a strong brand it would be your duty to make sure that the brand is protected against both outsiders and by people you are granting franchises to. You may therefore need to take specialist advice on your service or trade mark so that your rights can be protected.

You must also have a track record in showing that your ideas work successfully and that the know-how can be passed on to the benefit of a third party. A franchise manual will be drawn up showing how systems work and outlining performance and quality standards. This will cover both the set-up fees and continuing operations. You will also need to turn your thoughts to developing a training programme for both initial and continuing training. The work involved in all of these steps will involve the input of solicitors and intellectual property consultants to ensure that you have adequate protections in place before you contemplate looking for franchisees. A whole range of documentation has to be developed in conjunction with this exercise to ensure that a franchise network can be put in place with a meaningful support system and clear statements of rights and obligations. This documentation once in place will reflect the operational arrangements and ensure that the required intellectual property protections and licences to develop this type of framework. For an initial free consultation as to whether your business would be suitable for franchising please contact Morinne Macdonald.

 

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