Franchise development
Before you abandon all attempts to enter new markets independently or begin developing your own franchise, it's better to thoroughly study this issue. We're here to help with that
Franchise advantages
Royalty
New sales markets
Minimal risks
Additional income
Franchise weaknesses
- Additional
expensesYou'll incur additional advertising and marketing expenses not only in your region but also in franchisee's regions - Brand
reputationFranchisees may not always uphold brand standards, potentially tarnishing the brand's reputation - Staff
expansionExpanding in-house staff to monitor compliance with the terms and conditions of franchise development is necessary - Limited
profitYou will only receive the agreed percentage of profits
Stages of franchise development
Verbal brand identity
Naming, tagline, brand platform (mission, values, etc.)1Visual brand identity
Logo, corporate identity, retail design, packaging, uniforms, etc.2Economics and marketing
Economics and marketing3Legal pack
Registered trademark, brand book, retail book4
More about the stages
Verbal brand identity
The first stage of franchise development involves verbal identification, which is the expression of the brand and/or product through words. This includes developing a memorable brand or product name, crafting a slogan for the company, and defining the brand mission, which outlines the main direction of the company's development and goals. Additionally, understanding the brand's history is crucial as it helps consumers grasp the brand's DNA. Brand positioning is another key aspect to consider during this stage. It involves determining how to position the brand in the market, how to communicate with consumers, and how to differentiate from competitors. This stage lays the foundation for the brand's identity and sets the tone for all future communication and marketing efforts
Visual brand identity
Visual brand identification is a crucial stage in franchise development, supported by studies showing that people process visual information more effectively than other forms. During this stage, it's essential to create a company logo, choose corporate colors and fonts, design company signage, spaces, and equipment, and develop product packaging and employee uniforms. Establishing a consistent photo style, promotional materials, and social media presence is also vital. Additionally, preparing guidelines and layouts for franchise buyers to use these materials is essential for maintaining brand consistency across locations
Economics and marketing
The subsequent step involves developing the financial model of the franchise, outlining how it will generate profit, the frequency of returns, its dependencies, and the advantages it offers to buyers. Before delving into this, analyzing your existing business and forecasting its financial performance in both the short and long term is essential. Subsequently, attention shifts to structuring the franchise. Presently, two prevalent financial models exist: a lump sum payment and a monthly royalty. During this phase, it's crucial to account for all potential expenses associated with maintaining the franchise, including advertising, administrative costs, and commissions. Then, forecasting franchise revenue and determining the most suitable option becomes imperative
Legal pack
The final phase of franchise development is the preparation of legal documents, marking a crucial and significant stage. Initially, you will need to register the trademark and await confirmation of the patent. Following this, it is essential to compile a package of documents for the franchisee. This package typically includes a trademark usage certificate, the company's brand book, its business manual, and an agreement meticulously tailored to accommodate the specifics of your niche and address all potential risks