SYSTEMS THAT LINK FRANCHISEE PROFITABILITY WITH FRANCHISOR PROFITABILITY

When a franchisor designs plans to increase franchisee unit level profitability, the key question has to be, “How can we help franchisees make more money for themselves while we make more money too?” Franchisor profit is driven by royalties based on franchisees’ top line sales in most franchise systems. But there are many ways to make franchisees’ bottom line stronger. The problem is that not all of them strengthen the franchisor or its brand. Let us help you focus on the solutions that work for both franchisor and franchisee.

Scott Kern, founder of the Franchise Law Source, spent years running a franchise company where franchisee profitability was sometimes a problem. Allan Hillman has represented franchisees and franchisors in many situations where unit profitability was the root cause of the dispute. They have experience in developing and implementing programs that increase franchisee performance while serving the franchisor’s interests as well.

Let us help you design business building programs that will improve the bottom lines of franchisee and franchisor alike.

Create advertising and distribution programs
Programs that we have implemented include mutual advertising programs requiring additional franchisee commitment to trigger new franchisor contributions to marketing. Another requirement of these programs is the participation and contribution of a certain number of franchisees in a region to trigger the franchisor’s payment.

Other programs, such as new product introductions and image upgrades have to be carefully implemented to insure compliance with your franchise agreement and, in some cases, with local laws and regulations.

Even introduction of the franchisor’s product or service into a new channel of distribution – if handled properly – can build the business for both the franchisee and franchisor.

Can’t imagine how introducing your products into a new channel of distribution competing with your franchisees will build their business and yours?

Call us to help you imagine how to build and execute win-win programs to improve profitability in your company.

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