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

Failure to optimise all but one component can result in poor performance, a solid thumping from competitors, or even spectacular failure affecting numerous franchisees.

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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