In order to build an effective and well-coordinated business model and avoid a number of complex problems, of which there can be many in franchising, due to the specifics of the business, where the basis is intangible assets, intellectual capital, which can become the object of illegal copying and counterfeiting by unscrupulous partners (franchisors), the parties must carefully work out the entire franchise agreement. The franchising package is sort of a big book, or «instructions to use» by this or that franchisor concept. It’s divided into blocks, each block has its own sections with useful information, there are applications for doing practical tasks, and all of this book, of course, has content — navigation, which the franchisee can quickly navigate.
Franchise package structure
A franchise package is a set of documents that protects the franchisor, as the owner of its intellectual property, the entire franchise concept, from possible conflicts with its franchisees and claims from franchisee customers, regulates and regulates the use of the trademark and any unique technologies and know-how of the franchisor. A simplified scheme of the franchise agreement, with an emphasis on the structure of the transferred package, is presented in figure 1.
A standard franchising package should cover the following sections:
- Brandbook and trademark, or a set of documents for the right to use the trademark (brand) of the franchisor, which he provides to the franchisee for rent for the duration of the agreement.
- The secret of production (confirmed knowledge), i.e. the very essence of the franchise concept of how to conduct business, which the franchisor provides to the franchisee under the terms of the agreement.
- Operational manual, which outlines the procedures for conducting the franchise business.
- Services provided by the franchisor to its franchisee.
- Financial block — a list of payments and the terms of their payments to the franchisee.
Brandbook and trademark
When it comes to franchising, the importance and value of a brand is greater as it is more socially responsible. As the entire franchising system becomes, especially one that seeks to build a positive perception of partners and end consumers. Each franchisee is responsible for realizing the vision of the brand, and it is branding that helps each member of the franchise network to do this consistently and effectively in order to achieve greater brand awareness and loyalty. In addition, having a well-recognized and well-established brand can help attract new franchisees and therefore increase the growth and profitability of a company.
In addition to the intuitive perception of the brand, the brandbook includes documentary support. This includes a set of documents for a legally issued trademark by the franchisor. A trademark is a mark, individual words (including personal names) or drawings, letters, numbers, colors, product form or packaging of goods or sounds that serve to identify and individualize the goods and services of legal entities from similar goods and services of other manufacturers. A company that has registered a trademark acquires the exclusive right to use the trademark in its activities and throughout the territory/territories to which the registration applies.
Achieving the successful development of the brand in the franchise network within the framework of the franchisor’s brand policy, and accordingly within the framework of the brand book franchisor, should be facilitated by:
- The brand vision clearly conveyed under the terms of the package. To achieve effective branding, the franchisor must have a clear and defined vision of what the brand represents, which must be clearly communicated to all franchisees and employees in order to provide a consistent understanding consistent with the company’s values.
- Creating a strong and consistent visual identityVisual identity is an important part of branding and includes elements such as logo, colors, design and typography.The franchisor for his network must create a strong and consistent visual identity that can be applied across all locations and marketing materials.
- Creating a Detailed Brand GuideTo ensure that all franchisees consistently follow the visual identity and voice of the brand, on a brandbook, the franchisor must develop a detailed brand guide that includes instructions on how to use visual and verbal elements.This ensures that all marketing materials, from print ads to social media posts, follow a single style and align with the brand’s vision.
- Continuous training and support for franchisees. It is important that franchisees feel supported in their role as brand representatives: The franchisor should organize ongoing training and support in areas such as marketing, customer service and brand management to help understand the brand vision and apply it correctly.
- Active communication and organization of feedback. In order to ensure consistent understanding and implementation of branding, it is important to encourage communication and feedback between the franchisor and all of its franchisees.The franchisor representatives should be ready to always answer questions, listen to feedback and offer recommendations.In addition, it is also important to solicit feedback from franchisees and customers about the work of the brand and use this information to improve and adjust the branding strategy as necessary.
- The use of modern information technologies for brand homogenization. Information technology can be a valuable tool to help homogenize a brand across the network. For example, a franchisor can use an online brand management system to allow all franchisees to access brand resources and consistently create their own marketing materials. In addition, you can use brand tracking software to ensure that all franchise points follow the same brand principles.
- Support a proactive attitude towards branding. Branding is not something that is created and forgotten, but rather a continuous process: To achieve successful branding in franchising, a company must maintain an active position in brand management, constantly looking for new ways to improve and adjust branding strategy in order to stay abreast of trends and market needs.