Franchise Business Consultants - Frequent Questions and Answers
Easy guide to "The Seven Steps of Franchising"
1. What is a "Letter of Response"?
It's a letter of franchising inquiry for the Arab countries,
informing the "Franchisee" about our company's profile
c. Product line
d. Area "size" of each branch
On the other hand, you "the Franchisor" can ask
from your potential "Franchisee" about the company's
profile, a brief background about the potential Franchisee,
a potential location where the first Franchise could be established,
as well as financial statements for last three years in order
to evaluate eligibility of your future Franchisee.
2. What is a "Letter of Concept and Criteria"?
The Letter of Concept and Criteria is a letter about the
required criteria needed to grant a Franchise in regards to
the market demand and location for the new branch, the size
and characteristic of the potential market, as well as social,
political, and economic situations in the future territory.
3. What is "Pricing"?
To calculate Pricing, the Franchisor first needs to establish
the standard size of the Franchise shop and in accordance
with that, the pricing is then formulated.
If your shop is 100m², we would be able to estimate
the average sales per square meter.
Are we going to publicize the following formula?
Our projection is $2,500.
So its 100m² * $2.500 is $250,000 / year
$ 4,960.3/ week
$ 165.7 / day
Let's say, for simplicity's sake, that our average selling
product is $50, we can calculate the average clients per day
based on the previously calculated average sales, which itself
was derived from our pricing.
4. What is the "Uniform Offering Franchise Circular"
The Uniform Franchise Offering Circular covers standards
needed for negotiation before entering into the lengthy technicalities
of a Franchise Agreement such as Franchise fees, the Royalty
fees, Initial Investment as needed by the Franchisee for startup,
site characteristics and legal restrictions and allowances
that come with the Franchise package.
5. What is the "Franchise Agreement"?
All the technicalities and analyzed details of the Uniform
Franchise Offering Circular (UFOC) such as the terms and conditions,
restrictions for franchising regarding trademarks, logos,
training of the staff; obligations of the Franchisor towards
the Franchisee, obligations of the Franchisee towards the
Franchisor and much more.
6. What is the "Operational Manual"?
The Operations Manual is a highly detailed manual that describes
the requirements of pre and post opening training procedures,
taking into consideration the role of the branch manager,
an organization's structure; a typical day in the running
of the franchise, its personnel policies and more.
7. What is the "Training Manual"?
The Training Manual is a highly detailed manual that entails
step-by-step processes of how to train a branch manager to
run his own branch, as well as training the branch manager
to use these training procedures to train employees of the
franchise regarding all the different sectors, equipment,
and products in an organization, taking into careful consideration
the flow of interdepartmental communication as shown in the
personnel structure (also attached in this manual).
7a. What is the "Production Manual" or "Preparation
OPTIONAL: The Production Manual (also known as the
Preparation Manual) is mostly used in the case of restaurants
where recipes and processes are used in converting 'ingredients'
or other raw goods into finished goods (platters, meals and
refreshments). It involves a step-by-step process with accompanying
visuals (photos and, where necessary, presentations) which
is used to teach and train future employees to abide by the
standardized production methods, which have already been developed,
tested and are under constant scrutiny by the Franchisor's
head research and development team.
Please note that all the above manuals are available in
Arabic as well as English.