Considerations and Requirements for Franchising Agreements:
The franchisee is licensed to use both the trademark and the operating system according to the terms and conditions mentioned in the franchise agreement. Both the franchisor and franchisee must fulfill their obligations under the contract. Before granting franchisee the right to use the name,logo and run the business, franchisee and also the franchisor must reach some requirements. It is same for Aarong. Aarong also has to consider the fact seriously. Before it starts signing agreements, it has to be confirmed both parties are meeting minimum requirements for the deal. Areas of requirements are mentioned bellow that can be used by Aarong to grant international franchise agreement.
Information: We can also refer to term “knowledge about franchisor”. Franchisees must have researched on the background, mission, vision, goal and ...view middle of the document...
UFOC or Uniform Franchise Offering Circular is the other name for the discloser. There are number of other documents and legal requirements that will have to be met in order to set up retail franchised stores of Aarong. Registration requirements to offer franchises in different countries are different. Lawyer or attorneys with experience in franchise law will have to be hired to fulfill legal requirements.
Key Considerations: How much will be the franchise fee for Aarong, how large will be the local area for each franchise these are issues to be brought under consideration. As Aarong plans to be an international franchisor, it will also have to appoint new employees to handle this newly created department that establishes communication with franchisees. Staffs of this department will help franchisees to operate the business in given territory with ease.
Financial and Budgetary: Franchise Company or organization must have financial statements audited. It is also a discloser requirement in most countries. Aarong also will have to consider budgets of franchisees. Sometimes franchisee may need financial help in loan means.
Teaching and Guiding: Franchisees require training most times. Aarong may create a training method and systematic approach toward educating franchisees about operating the business. Aarong will have to be ready with advertising plans to offer franchisees. Aarong will have to formalize any plans those will retain existing customers and attract new customers.
Mutual Understanding and possibilities for trust: Aarong should only tie up with franchisees who it considers as trustworthy. Having a right attitude towards success and focus on goal is a prerequisite to start a franchising deal. Understanding franchisees and having a clear picture of operation areas of franchisees will help build mutual understanding between two parties. Aarong as a franchisors have to use lot of persuasion to get what it wants. Mindset of treating franchisees as employees will obliterate the way of building mutual understanding. As a result overall success will be hindered.