05/08/2010 - 00:00

Licence to operate needs education

05/08/2010 - 00:00


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While those starting an independent business may be flying solo with little support, an often-quoted bonus of the franchise system is the pre-existing infrastructure.

Licence to operate needs education

While those starting an independent business may be flying solo with little support, an often-quoted bonus of the franchise system is the pre-existing infrastructure.

But the expectations placed on this nurturing relationship may be the biggest blunder of a new franchise – for both franchisor and franchisee.

So who does the responsibility for operating a business and making it successful lie with and how responsible is a franchisor for their franchisees’ welfare?

In the franchising sector, where the very nature of the business model means the lines are blurred between who is responsible for what, a franchisee could be forgiven for developing an ill-fated level of confidence in the strength of the franchisor’s business practices, when in fact they are responsible for that part of the business themselves.

Traditionally, the franchise model has meant the franchisor is partly responsible for training new franchisees or at the very least, introducing them to the ways of the business.

Training courses for the franchise sector have grown in the last few years with a number of registered training offices now offering accredited training and Queensland’s Griffith University recently taking up Australia’s only franchising postgraduate.

Courses focus on subjects such as how to establish a franchise operation, how to manage franchise operations and generic business skills like human resources and marketing.

Franchise Council of Australia Franchise Academy governor Andrew Terry believes education should be mandatory for franchisees buying into a business.

“I argue very strongly for some sort of qualification or at the very least attendance of a course as being a prerequisite to starting a franchise; we don’t let someone drive a car without a drivers licence,” Mr Terry said.

“Education for franchisees and franchisors is massively important. Franchisees have to realise the realities of franchising. Franchisees at the very least need to realise they are effectively leasing somebody else’s brand and system for a period of time.”

Mr Terry said educating franchisees and franchisors is about challenging the traditional issues of the franchising model.

“I think everybody has recognised that perhaps the biggest problem in a franchising relationship is unrealistic expectations,” he said.

“Franchising is a complex and intricate relationship and the more prospective franchisees that know about that, the more likely they are to have realistic expectations.

“The more a franchisee understands what a franchise is, how it works, when it works, why it works, what are the pressure points, the more they can make a realistic decision.”

Franchise Alliance principal director Geoff Langham said while an important element of training in the franchise sector is on-the-job, certificates and diplomas are handy tools for franchisors and franchisees.

“We think training has always been essential. Often there is the presumption that the franchisee will have the basic knowledge on how to run a business and we find that they don’t,” he said.

“It is a bit simplistic to think those qualifications tell you everything you need to know. From the franchisor’s perspective they need to get their training down to a very practical level as well as the theoretical level.

“The obligation falls to franchisors and the consultants they work with to tailor-make training for their franchisees in their individual system.”



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