What a Franchise Lawyer Learns from His Clients
Starting a franchise is an exciting process and undertaking. So much so, that one major benefit of being a franchise lawyer is that I get to work with extremely focused clients who understand entrepreneurship and who, more often than not, are extremely motivated to bring their business experiences to the "franchising table". So, in partnering and working with our clients to develop their own franchise system, along the way, there are many business points that I learn. Here are a few:
- Business Systems are Critical. Every successful business requires established systems and procedures that are focused on the consistent delivery of product or services. Nothing should be left to chance so as a business owner and future franchisor consider what your systems are for (a) advertising and promoting your products or services, (b) communicating with prospective clients, (c) scheduling the performance of services or the delivery of product, and (d) consistently communicating and informing your clients and customers.
- Understanding Your Client Base is Critical. I am always impressed by how well our franchisor clients understand their customers. When establishing a franchise one of our questionnaires relates to customer demographics and information. Our clients readily answer this question by focusing on their "perfect customer and client" and they readily provide us with a detailed description. So, if you are considering franchising, can you answer who your "perfect customer is" and are their key characteristics? When establishing the location of franchised locations, this information is critical.
- Database Systems are Critical. Many of our clients utilize database systems to maintain customer lists and to facilitate consistent email communications, promotions and mailings. This makes sense and, quite frankly, is almost mandatory in todays business environment. In addition to the delivery and sale of your products and services, as a franchisor, database systems will be critical to facilitating and maintaining communications with franchisees. Following the lead of our clients, I personally utilize Infusionsoft to manage our client communications and franchise law publications. What systems do you maintain? How do you track and communicate with your customers? How will your franchisees communicate with their customers?
So when it comes to franchising, understand the significance of your "business systems" and why it is critical that your FDD and Franchise Agreement account for these business systems and create a legal platform that will allow these systems to evolve and change over time.
