How to open a business franchise

How to open a business franchise

entrepreneurs, who have decided to start an independent Business franchise, better to get acquainted with the process of doing it, to continue to avoid possible complications. Using a franchise is ideal for aspiring entrepreneurs, due to the presence of waste is already an efficient business model, cooperation with the largest and most successful franchisors, Companies whose brands are widely recognizable.

The advantages of using ready-made business ideas there, but in any business should calculate in advance all the expenditure for the purchase of a franchise, then to, Properly organized business and reducing risks, anticipate profit.

What to say about a franchise in the Russian legislation?

What does the Russian legislation on franchising?

Given the short period of time to use this business model in the world market, not surprising, that in our country the franchise used recently. However, modern entrepreneurs can share their experience, even for a short period.

the amazing thing, that in the Russian legislation, the term "franchise" is not used at all, and therefore there is no legislation, regulatory process. In this way, classic franchise theoretically exists only in Western countries, but not in the Russian Federation.

On what basis then Russian entrepreneurs can carry out their activities in the country? Analogue franchise agreement in Russia is considered to be a contract of commercial concession, as reflected chapter 54 Civil Code of the Russian Federationand. If you get a grasp of the provisions of the Code, governing the contract of commercial concession, it is possible to find a few pleasant moments, which relate to the activities of the franchisee:

  • This contract regulates the transfer of rights to use the trademark in such a way, that if the franchisor decides to convert any branded items, decorated with the agreement of commercial concession, then on the basis of the provisions of Article. 1039 The Russian Civil Code, it must be agreed that action to franchisees and to seek his approval.
  • The franchisee territory stipulated clearly under the concession contract, a franchiser, under the provisions of Article. 1033 Civil Code of the Russian Federation, is not entitled to grant the right to use their symbolism to a third party in the said territory.
  • The franchisee has an advantage over others at the conclusion of the concession contract following a period of three years after the expiration of the first contract. This right is enshrined in Article. 1035 Civil Code of the Russian Federation, and in case of violation of the entrepreneur has the right to demand compensation for their losses, not only, but also the possible benefits, which was lost as a result of violations of these rules. Another important point is that, the franchisor is required to renew the concession contract on the same terms, regardless of, Is it economically beneficial or not for him.
  • Within Article. 1034 RF Civil Code stipulates subsidiary liability of the franchisor in relation to the franchisee.

As can be seen from the above,, all of these benefits for the entrepreneur, opening a business franchise, They are very uncomfortable and often unprofitable for franchisors. Because, that the Russian legislation still does not resolve the issue in the country franchising, Franchisors often resort to a legally authorized subterfuges, which is that, to execute such a transaction is not commercial concession agreement, and other treaties. In this case, the license agreement used franchisors, commission agreement or sale of equipment. using the latest, the franchisor is able to legitimately get rid of burdensome obligations for him and limits, which in turn makes it more unstable state franchisees and increases the risks to its business launched.

Therefore, when buying a business for the finished model employer is especially important to study the conditions, which will be formalized agreement, and also to agree in advance on the definition of the boundaries of the territory, which will operate the exclusive rights to the purchased brand.

How to choose a niche to complete the purchase of the franchise

The first step in the process of buying a ready-made model for the entrepreneur is to choose one particular of the many, on the market. For, that the process was more orderly, it is necessary to classify all available at Franchise market in certain areas of business. All ready-made business model can be divided into three main groups, which are used in trading activities, production activity or services sector, and the employer must determine what niche of these he wishes to conduct future activities.

Trade franchise entrepreneur will buy from the franchisor certain goods for resale. Promotion of products on the market will contribute to an existing recognizable brand and trademark of the franchisor.

In that case, if the owner buys a franchise production, then he passed the franchisor all routings, as well as instructions for conducting the production processes and the purchase of necessary equipment at these suppliers franchisor. Besides, the franchisor undertakes to establish the manufacturing process at the new enterprise, developing the technology and employee training.

If an entrepreneur starts a business franchise for the provision of services, he has at his disposal a detailed guide on selected services, including a detailed description of. In addition, the franchisor undertakes to train the personnel right order services.

What nuances should discuss the entrepreneur during the negotiations with the franchisor?

What nuances should be discussed during the negotiations with the franchisor?

When the owner decided on the choice of a particular franchise or even a few, it can start negotiations with the seller of the business model.

First it is necessary to thoroughly examine the franchisor's commercial offer, which can usually be found on the official website or on the site for the implementation of franchises. Often, this document is not big, but it helps to clarify some important points.

for example, there will certainly defined the rights and material benefits, which receives the franchisee in case of purchase of finished business model. Visionary entrepreneur will ask the franchisor a detailed definition of the rights and material resources, purchased the franchise, not missing a single item.

Thus, the prospective franchisee and the franchisor will be able to clear up more quickly for themselves important for starting a business nuances, which can be interpreted by each completely different:

  1. Will the monopoly franchisee in the selected area or the franchisor is planning to sell a franchise there and other entrepreneurs.
  2. Will the franchisee training carried out in some special center, Does the franchisor experts will arrive in the new company or the franchisor limited educational brochures.
  3. How will the franchisee advertising support? Do you plan to issue franchisor advertising materials, It will be the site if designed for franchisees?
  4. How often, and operatively franchisee can receive advice from the franchisor?
  5. What obligations the franchisee? What are the requirements for the future premises? Do you need to comply with uniform corporate style? It is necessary to calculate all the costs, related to this article, and eliminate misunderstandings. Businessman kindly request a list with the current value of the necessary equipment, including delivery and installation.
  6. Buying a franchise trade may require the franchisee to buy back a large enough volume of goods, regardless of the current demand, thus depriving the franchisee the lion's share of current assets.

Honestly working franchisor often comes to the future franchisee and gives those business contacts, who are already working on a franchise. After talking with them, young entrepreneur can learn about pending its complexities and pitfalls, not specified in the offer of the franchisor.

Important considerations when preparing a business plan: calculate the break-even point, the actual payback period and provided the risks

When the entrepreneur has considered all the nuances, related to the acquisition of the franchise, for it comes a new and important phase of the settlement. The basis is offered by the franchisor "optimistic" version of the business plan, which does not include the possible risks, that the businessman to be finalized.

Legal aspects of the transaction for the franchise

Entrepreneur protect themselves in legal terms, if the advance will ask the franchisor the draft agreement and its details will examine. Thus the conditions will be compared, discussed in the negotiations and in the prescribed documents, and you can see at a glance, He enjoys the franchisor by the legal tricks, which are possible due to the imperfection of Russian legislation on franchising.

In that case, if the entrepreneur does not have sufficient knowledge of the legal issues concerning intellectual property transactions, he should hire the services of a professional lawyer or company, provides legal services. Legal examination of the contract, after which it issued a written opinion on the conformity of the document with the current laws, It helps the entrepreneur to protect themselves against possible risks. To confirm, that the contract complies with all the terms of the franchisor promised talks, the entrepreneur should be attached to the contract, gave the examination, the list of rights, wealth and liabilities, available in his arms. It should also rule out the presence in the contract representing the hidden risk for conditions franchisee.

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