What launch support should I expect from a franchisor?
answered by Vicky WilkesSenior Associate at Squire Patton Boggs (UK) LLP
The main support usually provided will be in the form of training and access to the franchise manual. Usually, a franchisor will provide initial training to the franchisee to ensure they have the right skills, knowledge and tools to operate and manage the business. This training may be face to face on site or, in some cases, online.
The franchisor may also offer advice on finding appropriate premises, hiring staff and giving general guidance in setting up the franchise. There may also be, alongside the obligation to provide the equipment and fittings for the franchise premises, a marketing budget for the launch of your franchise to give it publicity and market presence.
A franchisor may also assist a franchisee with obtaining finance. This will typically involve building a relationship with a particular bank and providing detailed information about how the franchise operates and how it’s performing, in the hope the bank will recognise the value of the franchise and be more willing to lend to prospective franchisees.
Occasionally a franchisor might offer to lend money to a franchisee. However, this should be approached with caution, as it could lead to a franchisee becoming financially dependent on the franchisor, as well as blurring the franchisor/franchisee relationship.
Vicky Wilkes is a senior associate at law firm Squire Patton Boggs (UK) LLP, specialising in both domestic and international franchising.
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