This site provides New zealand Franchising Information on this powerful distribution method

 

Characteristics of franchise operations

• The business format is comprehensive and complete. The system and business method must be capable of being passed on, otherwise the franchisee cannot be taught how to use them.
• Established and proven, pilot operation. The franchised business must be thoroughly tested and proven in practice to be successful. This is usually achieved through the use of a pilot operation. Until the Franchisor has tested his ideas in the market place and proves that they work he has nothing to sell.
• An Operations Manual containing a detailed written explanation of the Franchisor's systems and the way the franchise is operated. It is essentially a blue print of the Franchisor's business success.
• A Franchise agreement which sets out the contractual position between the Franchisor and franchisee.
• Payment by the franchisee of ongoing royalty / management fees to the Franchisor.
• Brochures telling of estimated profits and success stories which cannot be substantiated.
• The Franchisor offers immediate help and assistance to the franchisee
• Payment of an initial fee to purchase the franchise.
• The Franchisor provides continuing support and guidance to the franchisee.
• Payment by the Franchisee of ongoing fees.
• The franchise should have some unique selling points eg, branding, the method / system of operation.
• The costs and returns must be worthwhile for the Franchisor and all the franchisees who operate within the franchise system.