A franchisor is an entity or company that owns the rights to a business concept, brand, or trademark and grants permission to individuals or entities (franchisees) to operate under its established brand name and business model. The franchisor provides support, guidance, and training to franchisees, ensuring consistency in operations and brand standards across all locations. Franchisors typically charge initial franchise fees and ongoing royalties in exchange for the use of their intellectual property and ongoing support. They play a pivotal role in the success of franchise businesses by fostering growth, brand recognition, and profitability within their franchise network.

1. Understanding the
Franchisor
A franchisor is the owner of a successful business model who grants the
right to use their brand, systems, and processes to independent
entrepreneurs, known as franchisees, in exchange for a fee and ongoing
royalties.
by Gulshan Mishra

2. Responsibilities of a Franchisor
1 Provide Training
The franchisor is responsible for
training franchisees on all aspects of
operating the business effectively.
2 Offer Support
Franchisors must provide ongoing
support and guidance to their
franchisees to ensure the success of
the franchise system.
3 Protect Brand
Maintaining the brand's reputation and
value is a key responsibility of the
franchisor.
4 Innovate
Successful franchisors continuously
innovate their products, services, and
operations to stay competitive.

3. Qualities of a Successful Franchisor
Visionary
Leadership
Effective franchisors have a
clear vision for their brand
and the ability to inspire
franchisees to achieve that
vision.
Strong Operations
Successful franchisors
have well-defined systems
and processes that can be
easily replicated by
franchisees.
Adaptability
Franchisors must be able to
adapt their business model
to changing market
conditions and franchisee
needs.

4. Franchisor's Role in Franchise
System
1 Brand Management
The franchisor is responsible for establishing and maintaining the brand's
identity, reputation, and value.
2 System Development
Franchisors create and refine the business model, operational systems, and
support infrastructure for franchisees.
3 Franchisee Selection
Franchisors carefully select and approve franchise candidates who align with
the brand's values and vision.

5. Franchisor's Obligations to
Franchisees
Provide Training
Franchisors must provide comprehensive
training to ensure franchisees can
successfully operate the business.
Offer Ongoing Support
Franchisors are obligated to provide
ongoing support, guidance, and resources
to their franchisees.
Protect Brand Integrity
Franchisors must take actions to protect
the brand's reputation and value, which
benefits all franchisees.
Ensure Fairness
Franchisors must treat all franchisees
fairly and consistently within the terms of
the franchise agreement.

6. Franchisor's Rights and Protections
Trademark
Protection
Franchisors own the
trademark and
brand identity, which
they must protect
from misuse.
Royalty Fees
Franchisors collect
ongoing royalties
from franchisees to
support the brand
and provide
services.
Territorial
Rights
Franchisors can
grant exclusive
territorial rights to
franchisees to
protect their
investment.
Quality Control
Franchisors
maintain strict
quality standards to
protect the brand's
reputation.

7. Franchisor's Revenue Streams
Franchise Fees One-time fees paid by franchisees to
acquire the franchise rights.
Royalties Ongoing percentage of gross sales paid by
franchisees to the franchisor.
Product/Supply Sales Franchisors can generate revenue by
selling products, equipment, or supplies to
franchisees.
Advertising Funds Franchisees contribute to a centralized
advertising fund managed by the franchisor.

8. Becoming a Franchisor: Key
Considerations
Scalable
Business
Model
The business
must have a
proven, replicable
model that can be
successfully
franchised.
Strong Brand
Identity
The brand must
have strong
customer
recognition and a
positive reputation
in the market.
Operational
Readiness
The franchisor
must have the
systems,
processes, and
resources in place
to support
franchisees.
Legal
Compliance
Franchisors must
comply with all
relevant legal and
regulatory
requirements for
franchising.