Rules Franchisees Must Follow

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Rules Franchisees Must Follow

franchisee rulesIn franchising it’s all about the rules. That’s how the business model was setup. And because of that, it works.

To that end, it’s fair to say that if you become the owner of a franchise, it would behoove you to follow the rules. Because doing so is a proven way to increase your chances of success.

That said, if you’re thinking about buying a franchise, you need to ask yourself this question:

Are you a rule-follower?

I hope so, because if you’re not, your experience as a franchisee is not going to be pretty.

In view of that, let’s take a look at the eight rules all franchisees need to follow.

Note: your life as a franchisee begins the moment you sign your franchise agreement (contract) and pay the franchise fee.

Eight rules you’ll need To follow

1. You must open your franchise business by the date listed in your franchise agreement. If you don’t, you may be penalized.

2. You must attend formal training (which normally takes place at franchise headquarters) before you open for business. What is more, you’ll be responsible for paying all of your travel expenses, and if someone from your staff is required to attend training, you’ll have to pay their expenses, too. Training usually lasts a week or so.

3. You’ll be required to follow all the rules and  procedures contained in the 300-500-page franchise operating manual.

As you’ll see when you open the manual, there is a procedure for almost everything; from employee orientation and training to the specific steps your staff needs to take when dealing with customer problems and more.

4. As a franchisee, you must use any and all signage required by the franchisor. That means in-store signage along with outdoor signage containing the brand’s colors and their logo.

5. You’ll only be able to sell products and/or services that are stated in the contract.

For example, if you buy a dry-cleaning franchise, you aren’t permitted to sell donuts and coffee to your customers.

6. Your business will need to be open the days and times specified in your franchise agreement.

In other words, you can’t close your franchise business on a Sunday just because you feel like it.

7. When you’re a franchisee, you’re required to pay royalties to your franchisor for the length of your franchise agreement.

That means that once a month, you’ll pay a pre-determined percentage (4% or more) of your revenue to franchise headquarters.

Additionally, a good number of franchisors require franchisees to pay into a national marketing fund; figure paying 1-2% of your revenue.

8. When it comes time to sell your franchise business, the person you’re selling it to must be approved by your franchisor.

That’s because your franchisor doesn’t want just anyone to become the new franchisee. It needs to be someone who is financially qualified and is a good fit for the business, so they have a reasonably good chance of success as a franchise owner.

So, what do you think about those rules? Are you comfortable following them? Do any of them bother you? Would any of the rules listed prevent you from becoming a franchise owner?

If so, you need to take a step back and decide if owning a franchise is the right thing for you to do. If not, and as long as you know what all the rules are-and are comfortable with them, franchising could be in your future.

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