What are my responsibilities as a franchisor?

Although becoming a franchisor allows you to concentrate on your own business while, hopefully, your franchisees bring in money elsewhere, you can’t completely leave them on their own.

Not only do you have to provide the tools and training for them to do their jobs, you also have to abide by a series of rules that are among the most stringent in the world.

The most relevant regulations surrounding franchising are found in the Franchising Code of Conduct, which was introduced in 1998. Overseen by the ACCC, the code includes a mandatory dispute resolution mechanism, an annual statement by an independent party that the franchisor is solvent and a cooling off period.

The code can be viewed here.

Beyond this, you should provide as much support as possible to your franchisees. Bear in mind that their failure is your failure too.

“A lot of it is about relationship management,” says Steve Wright, executive director of the Franchise Council of Australia. “You’ve got to do what’s required to market your network. You can’t just expect them to carry that burden themselves.”

“Typically, a franchisor will do broad marketing while the franchisee will do local marketing. The franchisee will get annoyed quite quickly if that marketing support and fulfillment isn’t there, and rightly so.”