The franchised support system
One of the main practical differences between a simple distribution scheme and a mature business format franchise is the extent of the initial and continuing support services offered by franchisors to their network of franchisees.
Franchisors take on responsibility for:
Product and service development
National promotion and PR
Purchasing financial and administrative services
Quality control and national accounts
Network communications and discipline
The skills involved are not the same as those required by field managers in company-owned networks. Also, an investment is involved in making sure that the necessary support services can be delivered to your first and subsequent franchisees as the network grows exponentially.
It is not unusual for franchise networks to grow to 50, 100 or 200 franchisees all of which must be supported through the life span of the contract.
The extent of support offered varies according to the type of business and according to how it is structured. A job franchise network – e.g. a single operator such as a man in a van – will offer extensive administrative and financial services to their franchisees.
A management franchise – e.g. where franchisees employ and manage – will not be as involved in the day to day administration but will provide training to franchisees on, for example, recruiting and selecting staff, in addition to many other services related to supporting the management functions.