The criteria for establishing a franchisor.

All of us are aware of successful prosecutions by authorities in the Franchise sector of the business world. Why does this reoccur?

Franchisors have a duty to those entities (Franchise Holders) where the criteria for such responsibility is clear as follows:

• This is a franchise i.e. an arrangement exists where the owner of a brand or trademark allows a person to earn money by using the brand or trademark, or the reputation of the brand in running the business (Franchisee)
• The franchises business has a material and intellectual property association with the franchisee. (Trademark, Logo, Marketing)
• The franchisor has a significant degree of control or influence over the franchisees affairs. (Financial, Operational matters and Corporate issues). That is anything that affects the franchisor in terms of revenue or profits.

The above is a simplified breakdown, however these points are the sharp end of the stick.

Either you are a Franchisor or you are not. In either case your organisation needs to distinguish itself by coherent policies and procedures that mirror your corporate status in the legal sense.