FRANCHISING CONCEPT

By

Dr. Mohammed Duliem Al-Qahtany

Franchise Expert

What is Franchising?

The transfer of Intellectual Property Rights (IPR ) including but not limited to

Trademarks and

Technical know-how

Provides added value to the business operation between two parties

Franchisee and

Franchisor

As market entry barriers break down globally …

Love Marks

(Brand)+ Technical

Know-how

+ Economies of Scale

=

The Future in Franchising

A proven business modelOver 15,000 franchises world

wideOver 80% of the retail offer in

Major malls are Franchised (GCC) Over 75% of Hotels (Worldwide)

are franchise operations

GLOBAL OVERVIEW

What Type ofBusiness Sectors?

Health and Beauty Leisure and Travel Motoring Logistics Real Estate Food and Beverage Home Improvements TV and Media

services Management

Services Fashion and

Lifestyle …and more

F R A N C H I S O ROPERATIONAL BENEFITS TO THE FRANCHISOR

FINANCIAL BENEFITS TO THE FRANCHISOR

Expand without the risk of high capital expenditure and debt accrual

Capital injections from franchise fees

Cash flow benefits from management service fees–MSF

Less risk of Management Fraud

Lower Human Resource liabilities

Marketing PowerBrand managers achieve 'first-in-mind' levels of recognition = more bang for the buck in MARCOMS activity

Market ShareExtended geographical penetration = customers accessibility = brand loyalty

Group Purchasing Strength Increased volumes + centralized buying = competitive pricing structures

Fast, Effective, Geographical Expansion

Use of the local expertise = better results in a shorter time-frame

Rationalized Central Management

Operating and managing = less demands on core organisation infrastructure

F R A N C H I S E E SFINANCIAL BENEFITS TO FRANCHISEES

OPERATIONAL BENEFITS TO FRANCHISEES Lower development

costs Reduced capital

expenditure Quicker ‘payback’

period Centralised

development costs Power purchasing Improved NP

A tried and tested business formula

A brand identity A shortened

learning curve Education and

know–how Network support

Critical Assets - What to look for?

Business management reputation Financial feasibility Differentiation Transfer of know-how Flexibility Market trends and conditions Proven business system Capital resource Competent and experienced

executive team

The Franchise Development Programme

Develop a “System of Critical Assets” required to support and sustain a successful franchise

The “Critical Assets System” covers over 150 aspects of your business

The result will be a fully-pledged franchise operating system

Three Phase Approach

1•Evaluation

2•Assignment

3•Operations

Extracting the DNA• The mission, vision and the

core values • The business system

definition• The intellectual property

protections• The critical financial

characteristics and financial models

• The market opportunities and constraints

• The franchisor investments andreturns

• The creative business solutions forsustainable success

Announcing to and Securing the Right Franchisees• The franchise marketing

plan • The screening and selection

criteria • The franchise information

memorandum (FIM)• The franchise agreement

(legal contract) • The local business plan • The site search and

selection process• The design and installation

schedule• The local business launch

campaign model

Putting the Theory into Working Practice • The policies and

procedures• The operating manuals• The pre-launch training

requirements• On-going training and

motivation techniques• The franchise

administration system • Business development,

feedback, audits, troubleshooting

DeliverablesDedicated Franchise Mentors – an extension of your team providing : • Specialist support • The business plan • The marketing

tools and strategies

• The legal framework

• The operating manuals

• The management control system

The Timeframe

EVALUATION1-12 weeks

ASSIGNMENT9-18 weeks

OPERATIONS1-32 weeks