MONEY
Simplify the law
FRANCHISING
Some kinds of business lend
themselves to franchising
arrangements. There are
obvious examples of this in the
retail and catering sectors, but
many brands of all types are in
fact franchise-based businesses.
You can rapidly expand a brand
by granting franchises, but
bear in mind that you will be
handing over some degree of
control over your reputation
too, so be careful. A franchise
is a business for the franchisee
too, so you will need to make
it an attractive proposition
for them. The initial franchise
fee, and any turnover-based
subsequent payments, should
be proportionate. Most
importantly, don’t make it
difficult for the franchisee by
granting competing franchises
in the same area.
If there is anything in the
business which you will require
to be done in a particular way
it will be down to you to set the
standards and rules. Therefore,
you will probably be responsible
for compiling and maintaining a
franchise handbook.
You may need to license
trademarks etc. to the
franchisee in order for them
to be able to promote your
brand effectively. At the same
time, make sure you protect
your intellectual property, and
that your agreement does not
enable the franchisee to set up
a directly competing business
during the franchise or too
soon after termination.
OUTSOURCING AND
SUB-CONTRACTING
Some parts of a business may
be of a general kind, such as
financial management, payroll,
HR and customer service.
There are businesses that carry
out these functions for other
companies, and whatever the
size of your business this may
be a suitable option in order to
free up your time. The cost of
outsourcing functions of this
kind need to be weighed against
the cost of employing staff to
perform them, or the value
of your own time if diverted
from the main thrust of your
business. Additionally you
will need to make sure your
business’ culture and ethos are
adopted by the supplier.
Offshore outsourcing
arrangements often have the
benefit of competitive rates,
but you’d need to be certain
that you understand the legal
and practical issues of dealing
with suppliers based elsewhere
in the world, from local
employment law to language
and skills levels.
In larger businesses, the
outsourcing of certain functions
involves restructuring the
workforce. Make sure you’re
aware of your responsibilities - it
may be that you are transferring
a function in a way that creates
rights for employees to be
transferred with it.
To make sure that an
outsourcing arrangement
delivers the service you want,
it is essential to describe the
service exactly, including the
standards you require and
how they are to be measured.
A service level agreement is
strongly advised, which defines
the success criteria and any
leeway allowed, and what the
consequences are of failing
to achieve them. A financial
penalty is common if failure is
at a certain level; and provision
for termination for a more
fundamental breach is usual.
Remember that the outsource
provider will be supplying you
with essential functions for your
business, so it is for you to decide
what standards you will accept.
It is possible, of course, to
outsource some core aspects of
your business, but you might
wish to consider whether
you want to hand over to a
third party responsibility for
something which makes your
business unique.
So there you have it - step six
is complete and you’re well on
your way to success!
Good luck!
You can
rapidly
expand a
brand by
granting
franchises,
but bear in
mind that
you will be
handing over
some degree
of control
over your
reputation
too
Contact:
www.simplifythelaw.co.uk
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