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STRUCTURAL
ALIGNMENT
Structuring for Success
Getting
a franchise system’s structure right from
the outset is absolutely vital. Structural decisions
made at the outset go on to influence a franchise
systems growth, development and long term prospects
for survival and success.
Every
franchise system encompasses a number of key structural
components, each of which require configuring
with the utmost care. Examples of seven key structural
components include (but are not limited to):
- Franchisee and franchisor obligations
- Franchise Support Office structure
- Franchised form (e.g., single-unit, sequential
franchising, area development etc) or combination
implemented
- Initial, royalty, marketing and/or management
fees (possible income streams)
- Territorial delineation, restrictions and
protocols
- Franchise terms and renewal
- System documentation
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Failure to optimise all but
one component can result in poor performance,
a solid thumping from competitors, or even
spectacular failure affecting numerous franchisees.
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Consequently, the initial strategic assessment
and planning, feasibility analysis and implementation
is of paramount importance. Important factors
influencing structural configurations include:
- Specific business concept features (e.g.,
complexity, customer types)
- Path to franchising
- Owners personal and business objectives
- Available resources (financial & human)
- Stage of business and industry life cycle
(considering demand attributes, competition
etc)
- Environmental conditions and trends (e.g.,
Economic, legal, demographic, socio-cultural,
labor, capital, competition and supply)
Early analysis is highly complex. Proper analysis
requires a multi-faceted and multi-dimensional
approach, involving building and assessing multiple
structural configurations. Only once this formal
process has been undertaken, can you have the
confidence to proceed with franchise implementation.
Franchize Consultants (NZ) Ltd specialises in
Structural Alignment for new franchises, and,
Structural Re-Alignment - for improving sub-optimal
structures of existing franchise systems. Structural
Re-Alignment will be the focus of the next Franchize
Bulletin.
Phone or email
Win Robinson today (09 523 3858), and have Franchize
Consultants (NZ) Ltd determine the most optimal
franchise structure for your organisation.
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