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Franchisor Responsibilities

Before “starting a franchise” or “franchising your business” it is critical to evaluate and understand the role and responsibilities that you will be undertaking as a franchisor.

The Role Of A Franchisor

As a franchisor, basically, you will be taking what works and what has worked in your business and formalizing these systems and procedures so that they may be taught to and implemented by your future franchisees. Your “franchise agreement” will serve as the primary contract by which you grant third party franchisees the license and right to establish and operate your franchised business. Your role as a franchisor will include:

  • Franchised Expansion. The expansion of your business, business systems, trademarks and trade dress through “franchised expansion” that will occur through third party franchisees.
  • Formalizing Your Systems. To achieve your “franchised expansion” you will be formalizing and documenting what works in your business and the steps that franchisees will be required to follow. These formalized systems will be identified in the following legal documents which will be prepared by your franchise lawyer: FDD (Franchise Disclosure Document) and Franchise Agreement.

The Responsibilities Of A Franchisor

As a “franchisor” your primary responsibility will be to support the operations of your franchisees and to continuously develop and monitor the business systems, products and/or services that have made your business a success.

As such, your franchisor responsibilities will include:

  • Marketing. As a franchisor one of your primary responsibilities will relate to establishing a marketing foundation focused on promoting your brand, legally protecting your trademarks and establishing quality standards for your products and/or services.
  • Managing the Products and Services of the Brand. As franchisor, to promote your brand and goodwill you will be required to establish and maintain performance standards respecting the quality of the goods and/or services provided by your franchisees.
  • Managing the Market Area and Territory of Franchised Locations. As franchisor, you will strategically identify territories that will be targeted for franchise expansion. Initially expansion must be focused on geographic territories that can be properly managed and supported.
  • Proprietary Products. Identifying and establishing exclusive suppliers who will produce and/or distribute your “propriety” products to your franchisees.

These are just some of the ongoing responsibilities that a franchisor may have.

For additional information about the roles and responsibilities of a franchisor, contact Charles N. Internicola, Esq. at (800) 976-4904 to learn how to successfully convert your business into a franchise.

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

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