A corporate model in cross-section: the life cycles of a franchise partnership

Like most interpersonal relationships, a franchise partnership goes through several successive phases, the quality of which determines the success of franchisor-franchisee cooperation. In general, traditional franchising distinguishes four lifecycles, each with different characteristics and process structures. Find out how the typical franchise partnership process works and how franchisees can help ensure that each phase leads to the desired results from your real estate broker Engel & Völkers.

The first contact - initial moment of the franchising partnership

The beginning of each partnership in franchising is marked by the so-called recruitment phase. In the initial situation, a franchisor, in an effort to expand its franchising network, seeks, through various channels, potential franchisees willing to invest in their franchise concept. On the one hand, this can be done via classic advertising in print media, in public space via posters or various platforms on the Internet. On the other hand, career and investment fairs are proving to be a suitable stage for establishing initial contact between the franchisor and the potential franchisee. Here, both sides have the opportunity to obtain a first personal impression of the other party, and can already exchange views on economic objectives and mutual claims.

In this phase important foundations are laid for the later relationship: If the business plan of the franchisee and the franchisor convince the franchisor right from the start, and can find an agreement for suitable conditions for both sides in the context of contract negotiations with trust as a basis, this marks the ideal start in an ambitious, promising franchising partnership.

Phase two: Does the franchise concept fit in with your company?

If the franchisee or franchisee franchise agreement is closed and all preparations for the opening of the franchise operation have been made, the second stage of the franchise partnership is the integration of the franchisee into the franchise. While the property is set up in accordance with the terms of the franchise agreement and the goods cycle is initialized, the workforce also adapts to the new framework conditions of the franchise system: Depending on the concept of the franchisor, different introductory or adaptation programs exist, consisting of seminars and continuing education programs for example the franchisee and his employees. This phase shows how well the general structure of the franchise system and the individuality of the franchisee operation fit together.

Consistency and further development in phase three of the franchising partnership

Much of the processes and events within a franchise partnership are in the third phase. It's the time of franchising, which can last many years or even decades for a successful franchisee. However, the term "everyday life" should by no means be used to connote monotonously repetitive processes. Like the markets, society and the political situation in a large context, the franchise business should also be in constant flux and optimally adapted to all relevant external influences to adjust. Only in this way can a long-term economic success be guaranteed, which generates steady returns from economic fluctuations, trends and lifestyle phenomena. Responsible for the regular optimization of the franchising concept is the franchisor, who passes on his results to the franchisees. As an executive primary unit of the franchise system, they are then responsible for the appropriate implementation of the innovations.

Straightforward communication and meaningful coordinated developments that ultimately result from the successful first two life cycles of the franchise partnership are the best prerequisites for the continued success of a franchise system.

The end of joint franchising as the final phase of the partnership

Often not interpreted as part of the franchise partnership itself, the end of the relationship between franchisor and franchisee is a non-negligible aspect. Also in this final phase, there are a few points to consider in order not to lose efficiency. The franchisee has a productive fulfillment of the license term, the effort to achieve a consensual separation between franchisor and franchisee, as well as the timely planning of the financial connection existence.

If a cooperative, trusting, and productive collaboration can be achieved in each of the four phases, a full and profitable franchise partnership is likely for both the franchisee and the franchisor.

At Engel & Völkers you will find a multi-award-winning system of real estate franchising, characterized by international prestige, fair license conditions and a unique continuing education concept. More information about this investment can be found at the link below and we will be pleased to answer your questions by phone, e-mail or in person.