A sound franchise model is essential to successful franchising
In terms of legal requirements, a franchise model is not needed. But from a practical point of view, it is nearly impossible to succeed without a quality, proven franchise model in place. That means a model that is well oiled, proven, logical, and understandable. The facts of life in franchising dictate that a franchisor have a franchise model in order to prove that the concept works.
The central mission of a franchisor is to continuously work their model and system and keep it attractive to its patrons and to new franchises. In order to accomplish that goal, a franchise model, or prototype, is essential.
At the beginning of the franchise cycle you will find a particular concept that has been proven successful by an entrepreneur seeking to grow their business. Franchising, although a complex industry, is just one of many channels of distribution. Therefore, the business owner has several options for expansion other than franchising. Affiliate programs, distributorships, or company-owned outlets are alternatives to franchising. Each method or channel of distribution requires that the model or concept be proven in order to grow. In the case of franchising, the franchisor builds the network by using OPM (other people’s money) and other people’s time and management. Obviously, if people are to invest their money in a business opportunity, they want to witness proof of the it’s viability. So, a successful franchise model is a must.
Franchise model as training unit
Next in the cycle comes the training period. The franchisor must provide adequate training in the use of the concept. Often, the best training environment is an actual operating unit, or it could be a franchised unit. True, most “book learning” in franchising is classroom-based, but on-the-job learning is readily available in the field. This is accomplished in the most modern facility that the franchisor can provide.
Moving forward in the cycle you find franchise support. This very critical area of franchising demands that franchise support staff supply their consulting services with a focus on the latest, proven techniques. In order to provide such services, we simply take a look at the prime franchisor’s role. That role is defined above — namely, ever grooming the system.
Would we recommend purchasing a franchise without a proven franchise model? NEVER.