Franchise concept – why is it important?

If you have decided that your company is ready to scale up with the help of a franchise system, the first thing to start with is to conduct a franchise market research (the so-called market benchmarking) and then develop a concept for a future franchise. Without developing a clear concept, it is almost impossible to build a successful business chain.

As years of practice have shown, most problems between partners mainly arise after the signing of the main agreement and the start of work. To avoid such incidents as much as possible, the franchisor should make it a rule to always negotiate honestly with potential franchisees, be able to convey the main essence of the franchise concept, and openly declare the commercial performance of the business.

The concept is the foundation for building a franchise model of cooperation. In other words, the concept is the essence of a given business model, its format, identity in a competitive environment, and a brief description of the main stages of implementation.

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That is why, when starting to develop a concept, the franchise owner should try to answer the following questions: who is the main target audience, what value does the business bring to end users, whom does he see as a franchise partner, the format of the franchise business, areas of responsibility of the parties, points of control over partners, what is the main strategy for promoting and developing the franchise, who are the main competitors in the franchise market, and much more. The business logic and all related processes are finalized in the course of approving the concept.

When developing a franchise concept, it is necessary to define the goals of the franchise and formulate an algorithm for achieving them, develop clear systems: assortment, pricing, profit from the franchise business, training, etc., and draw up an action plan for the development and promotion of the franchise.

Let's take a closer look at the value of concept development

First of all, a well-developed concept gives the franchisor an understanding of the parties’ areas of responsibility and an overview of how to properly organize all internal business processes (especially those that will be delegated to the franchise partner and performed by the franchisor for the entire network).
Secondly, it allows to create a unique and well-thought-out offer for future franchisees.
Third, it minimizes the cost of attracting future partners.
And finally, it allows you to achieve your goals faster, because it is more expedient to move forward with a clear plan.

This leads to the conclusion that the franchise concept is a fundamental and one of the main documents of a franchise project. In the future, this document will form the basis of financial models (for the franchisor and franchisees), the legal block of the project, the brief of the presentation itself, and is also one of the presentation tools for the franchise offer at the final stages of its sale.

An essential point to pay attention to when developing a franchise concept is formatting.

Formatting is the franchisor’s proven variations in which the franchise business can be implemented, for example, the catering concept can be implemented in the following formats: dark kitchen, food court, food truck, restaurant with or without delivery, etc. To decide in which format to implement the business, you need to take into account the investment opportunities of partners, location, clearly identify your target audience, and your own resources.

A well-designed franchise concept allows the franchisor and franchisee to agree on the terms of cooperation while Франчайзинг Україна just getting off the ground – even before signing the main package of documents. This allows to take into account all the details of the future partnership. Even before purchasing a franchise, the franchisee gets a clear idea of what kind of business they will invest in.

Laying the foundation for franchise business development should be entrusted to professionals. Franchise Capital will help you develop a unique concept and create a competitive product. Experts will develop a concept not only for the franchise as a whole but for each format. The concept is developed for each project individually. As a result, you get a document that contains a summary of the main business processes for cooperation between all parties of the franchise.

Entrust your business development to true franchise professionals. Together we are able to achieve our goals and develop the franchise market not only within the country, but also around the world.