What are the responsibilities of a franchisee?

Shelley Nadler writes:

A franchisee will be responsible for obtaining funding for and setting up their business in accordance with the franchisor’s requirements. They will need to pay an initial franchise fee, as well as any additional costs necessary for getting the business up and running, such as equipment and fit-out costs of premises.

A franchisee will be also responsible for recruiting staff, although the franchisor may provide guidance. In addition, they will have to undergo initial training in the franchise system and may have to train some of its staff. A franchisee is responsible for the day-to-day management and operation of the business. The franchisor will provide the franchise system, but the franchisee must implement it, so must understand fully how the business works.

As a franchisee, you will need to protect the brand by operating the franchise in strict compliance with system operating standards. In many franchises, you will need to carry out marketing in your local area in accordance with the franchisor’s guidelines to attract customers. A franchisee will need to build a strong and loyal customer base by offering the products and services stipulated by the franchisor and providing superior customer service. They will need to prepare a business plan, plan for growth and understand the financial side of the business to improve profitability.

A franchisee’s full obligations will be set out in the franchise agreement, which should be reviewed before an investment is made.

Shelley Nadler is a legal director in Bird & Bird’s international franchising team and has many years’ experience of advising on all aspects of franchising.