Franchising and Licensing Two Powerful Ways to Grow Your Business in Any Economy_9 pptx

Statistics recently released by the Spanish Franchise Associa-tion demonstrate that franchising sales now make up over 6 percent of totalretail sales and employ over 8 percent of the nat

At the present, Colombia has the third largest number of franchises in SouthAmerica and is open to this kind of investment It has several dangerousdisadvantages, however, which include a high poverty rate (40 percent), thethreat of guerilla and drug violence, and a small local market

Western Europe

Franchising in Western Europe continues to grow at a steady rate The UnitedKingdom is a common entry point into Europe for many U.S and Canadianfranchisors and has no pre-contract disclosure laws or really any specificfranchisee legislation whatsoever Franchisee systems in France, Germany,and Italy continue to flourish, both home-grown and foreign franchise sys-tems Spain is emerging as a powerful force in European franchising; thenumber of franchisors operating in Spain has grown 150 percent over thepast five years Statistics recently released by the Spanish Franchise Associa-tion demonstrate that franchising sales now make up over 6 percent of totalretail sales and employ over 8 percent of the nation’s workforce Franchising

in northern Europe has also grown at a slow but steady rate, particularly inDenmark, Belgium, and Switzerland, whose early-stage homegrown fran-chise systems are starting to expand into other parts of Europe and have theirlong-term eye on the North American market

an opportunity Industries that are expected to succeed in this region arecleaning services, fast food, book and music retailing, professional training,hotels, and motels The two countries in Europe that are most attractive areRussia and Poland Hungary, the Czech Republic, Yugoslavia, and Bulgariaalso promise to be attractive franchising markets in the future

Russia

Russia boasts a very large consumer market with a population of 150 million

It has many negatives, however, that must be overcome The economy is

tainted by high crime rates, political problems, bribery, and poverty more, many Russian entrepreneurs and consumers are unfamiliar with andunconvinced of the advantages of franchising This is further complicated byaccess to capital issues, which are very limited, and entrepreneurs are afraid

Further-to put their own money on the line for such a venture Finally, governmentregulation has been unkind to franchisors and places many restrictions onthem

Poland

Poland is far more attractive It is the second largest country in Eastern rope (population 40 million) and it welcomes franchising as a step towardits economic development Locals are educated and are receptive to Westernbusiness and customs There are some obstacles concerning land rights, tightinvestment loans, and high rental rates, but these can be overcome Some ofthe emerging post-USSR nations are developing stable economies and agrowing middle class, and may lend themselves to successful franchising inthe not-too-distant future Some U.S franchise systems have already beenestablished in the Ukraine, Azerbaijan, and Kazakhstan, including Yum!Brands systems such as KFC and Pizza Hut as well as Subway and Baskin-Robbins Other types of franchise systems such as automotive care, homeservices, and business services franchise systems may flourish as these econ-omies stabilize

Eu-Regional Trade Agreements

NAFTA

On January 1, 1994, the North American Free Trade Agreement (NAFTA)among Canada, Mexico, and the United States began to take effect NAFTAmandates the eventual elimination of all tariff and nontariff barriers to tradebetween Mexico and the United States over 15 years Between 1993 and

1997, combined real U.S manufactured exports to its NAFTA partners rose

by 40 percent, with 34 percent and 54 percent increases to Canada and ico, respectively

Mex-MERCOSUR

The MERCOSUR was created in March 1991 with the signing of the Treaty

of Asuncion MERCOSUR is, since January 1, 1995, a Customs Union,whereby the Member States (Argentina, Paraguay, Uruguay, and Brazil) haveeliminated all tariff and nontariff barriers to reciprocal trade and adopted acommon external tariff for third-party countries In 1996, association agree-ments were signed with Chile and Bolivia establishing free trade areas withthese countries on the basis of a ‘‘4  1’’ formula This regime is not, atpresent, fully in effect The Member States of MERCOSUR negotiated whathas come to be called an ‘‘Adaptation Regime,’’ by which some products

traded among the four countries will, for a time, continue to pay duties Lists

of exceptions to the common external tariff for a group of specific productsalso exist The Customs Union will be in full effect on January 1, 2006 MER-COSUR as an international commitment is today something between NAFTAand the European Union

European Union (EU)

The EU was set up after the Second World War The process of Europeanintegration was launched on May 9, 1950, when France officially proposed tocreate ‘‘the first concrete foundation of a European federation.’’ Six countries(Belgium, Germany, France, Italy, Luxembourg, and the Netherlands) joinedfrom the very beginning Today, after four waves of accessions (1973: Den-mark, Ireland, and the United Kingdom; 1981: Greece; 1986: Spain and Por-tugal; 1995: Austria, Finland, and Sweden), the EU has 15 member states and

is preparing for the accession of 13 eastern and southern European countries.The European Union, which has its origins in the 1957 Treaty of Rome, hastraveled a long road of conciliation and negotiation in order to form todayone single market, and is striving to adopt common policies inside and out-side Europe ‘‘Single market’’ includes free movement of goods, free move-ment of workers, right of establishment, and freedom to provide services andfree movement of capital As of January 1, 2002, the EU launched the euro asits single currency goal, which has helped fuel the growth of franchisingsystems across Europe

FINANCIAL STRATEGIES

Business and Strategic Planning for the Growing Franchisor

Owners and managers of growing franchisors have come to understand thatmeaningful and effective business planning is critical to the long-term suc-cess and viability of its underlying business and to its ability to raise capital.Before you read about the various methods of financing available to the grow-ing franchisor in Chapter 13, you must understand the key elements of abusiness plan

The Strategic Business Plan

Regardless of the financing method or the type of capital to be raised, ally any lender, underwriter, venture capitalist, or private investor willexpect to be presented with a meaningful business plan A well-preparedbusiness plan demonstrates the ability of the franchisor’s management team

virtu-to focus on long-term achievable goals, provides a guide virtu-to effectively ment the articulated goals once the capital has been committed, and consti-tutes a yardstick by which actual performance can be evaluated

imple-Business plans should be used by newly formed franchisors as well asestablished franchisors The following is a broad outline of the fundamentaltopics to be included in a typical franchisor’s business plan

Executive Summary

This introductory section of the plan should explain the nature of the ness and highlight the important features and opportunities offered by aninvestment in the company The executive summary should be no longerthan one to three pages and include (1) the company’s history and perform-ance to date, (2) distinguishing and unique features of the products and ser-vices offered to both consumers and franchisees, (3) an overview of themarket, (4) a summary of the backgrounds of the leadership team, and (5) theamount of money sought and for what specific purposes

busi-233

History and Operations of the Franchisor

In this first full section, the history of the franchisor should be discussed ingreater detail: its management team (with resumes included as an exhibit);the specific program, opportunity, or project being funded by the proceeds;the prototype; an overview of the franchisor’s industry, with a specific em-phasis on recent trends affecting the market demand for the franchises; aswell as the products and services offered by the franchisee Figure 12-1 pro-vides a list of questions to be addressed in this section

Many of these issues will be described in greater detail in later sections

of the plan Therefore, each topic should be covered summarily in two orthree paragraphs

Marketing Research and Analysis

This section must present to the reader all relevant and current informationregarding the size and strength of the market for both franchisees and con-sumers, trends in the industry, marketing and sales strategies and tech-niques, assessments of the competition (direct and indirect), estimatedmarket share and projected sales, pricing policies, advertising and publicrelations, strategies, and a description of sales personnel The following is-sues should also be addressed:

❒ Describe the typical consumer How and why is the consumer attracted to

patronize the franchisee’s facility? What relevant market trends affect theconsumer’s decision to purchase products and services from the fran-chisee’s facility?

❒ Describe the typical franchisee How and why is the prospective

fran-chisee attracted to the franchisor’s business format? What factors haveinfluenced the prospect’s decision to purchase the franchise? What stepsare being taken to attract additional candidates that meet these criteria?

Figure 12-1 Questions to address in Section 1.

1 When and how was the prototype facility first developed? How has it performed? Will this be typical when the franchise systemis built?

2 Why has the company decided to expand its market share through franchising? What other tives have been considered and why did the company select franchising?

alterna-3 What are the company’s greatest strengths and proprietary advantages with respect to its franchisees? Consumers? Employees? Shareholders? Competitors?

4 What are the nature, current status, and future prospects in the franchisor’s industry?

5 Has an economic model and pro forma been built to demonstrate the viability of the franchise system

to both franchisor and franchisee?

6 Has the company selected its professional advisory system?

❒ Describe the market What is the approximate size of the total market for

the services offered by the franchisee? The approximate market for chisees?

fran-❒ Describe the strategy What marketing strategies and techniques have been

adopted to attract franchisees and consumers? Where do referrals for spective franchisees come from? Do existing franchisees make referrals?Why or why not? (Include sample promotional materials as an exhibit.)

pro-❒ Describe the performance of the typical franchisee Are current stores

profitable? Why or why not? What factors influence their performance?

Rationale for Franchising

This section should explain the underlying rationale for selecting ing in lieu of the other growth and distribution strategies that may be avail-able Discuss whether a dual distribution strategy will be pursued Underwhat circumstances will company-owned units be established? Explain tothe reader which method(s) of franchising will be selected: single units only?sales representatives? area developers? subfranchisees? Special risks andlegal issues, which are triggered by the decision to franchise, should also bediscussed

franchis-The Franchising Program

This section should provide an overview of the franchising program withrespect to key aspects of the franchise agreement, a description of the typicalsite, an overview of the proprietary business format and trade identity, thetraining program, operations manual, support services to franchisees, tar-geted markets and registration strategies, the offering of regional and areadevelopment agreements, and arrangements with vendors A detailed analy-sis of sales and earnings estimates and personnel needed for a typical facilityshould be included Discuss marketing strategies relevant to franchising such

as trade shows, industry publications, and sales techniques Explain the cal length of time between the first meeting with a prospect through grandopening and beyond What are the various steps and costs during this timeperiod (from the perspective of both the franchisor and the franchisee)? Dis-cuss strategies for the growth and development of the franchising programover the next five to ten years

typi-Corporate and Financial Matters

This section should briefly describe the current officers, directors, and holders of the corporation An overview of the capital contributed to thecompany thus far should be provided, along with an explanation of howthese funds have been allocated Discuss the anticipated monthly operatingcosts to be incurred by the corporation, both current and projected, not only

share-for operating and managing the prototype facility but also share-for the tive expenses incurred in setting up a franchise sales and services office.Discuss the pricing of the franchise fee, royalties, and promotional fund con-tributions Discuss the payment histories of the franchisees thus far Are theycomplying with their obligations under the franchise agreement? Why orwhy not?

administra-What portion of these fees collected from the franchisee will be netprofit? Discuss the amount of capital that will be required for the corporation

to meet its short-term goals and objectives How much, if any, additionalcapital will be required to meet long-term objectives? What alternative struc-tures and methods are available for raising these funds? How will these funds

be allocated? Provide a breakdown of expenses for personnel, advertisingand marketing, acquisition of equipment or real estate, administration, pro-fessional fees, and travel To what extent are these expenses fixed and towhat extent will they vary depending on the actual growth of the company?

Operations and Management

Provide the current and projected organizational and management structure.Identify each position by title with a description of duties and responsibili-ties and compensation Describe the current management team and antici-pated hiring requirements over the next three to five years What strategieswill be adopted to attract and retain qualified franchise professionals? Pro-vide a description of the company’s external management team (attorney,accountant, etc.)

Exhibits

Include exhibits in the presentation copies of the franchisor’s trademarks,marketing brochures, and press coverage, as well as in sample franchiseagreements and area development agreements

The Ongoing Strategic Planning Process

In a franchisor’s early stages, the emphasis is on the business plan—how do

we properly launch the franchising program to attract qualified candidatesand what resources will we need to sustain the program are all among thekey concerns But what happens later? Once a franchisor reaches 50 to 100units or more, the focus shifts away from mere business planning and on tostrategic planning In the context of franchising, strategic planning is an on-going process that seeks to build and improve the following key areas:

1 The quality and performance of the franchisees

2 The quality and sophistication of the technology used by the franchisor

to support the franchisees

3 The quality and sophistication of the training and support systems

4 The value and recognition of the franchisor’s brand from a customerawareness perspective

5 The development and communication of the franchise system’s ‘‘bestpractices’’ throughout the system as well as general ‘‘best practices’’ infranchising overall

6 The exploration of new domestic and international markets

7 The organization of franchisee advisory councils, supplier councils, branding alliances, and other key strategic relationships

co-8 The development of strategies for multi-unit franchising, alternativesites, and related new market penetration strategies

9 The development of advanced branding and intellectual property tection strategies

pro-Figure 12-2 Key strategic planning issues.

• What are the common characteristics of our top 20 percent franchisees?

• What can we do to attract more people like this in the recruitment and selection process?

• What are the common characteristics of our bottom 20 percent franchisees?

• How do we screen these out? What can we do to improve their performance?

• What are the five greatest strengths of our system?

• What is being done to build on these strengths?

• What are the five biggest problems in our system?

• What are we doing to resolve these problems?

The strategic planning process should manifest itself in periodic meetingsamong the franchisor’s leadership, periodic strategic planning retreats, and awritten strategic plan that should be updated annually Some of the issues to

be addressed are included in Figure 12-2 The strategic planning meetingsand retreats could be focused on a specific theme, such as brand buildingand leveraging, rebuilding trust and value with the franchisees, litigationprevention and compliance, international opportunities in the global village,leadership and productivity issues, financial management and per-unit per-formance issues, the improved recruitment of women and minorities, tech-nology improvement and communications systems, alternative site andnontraditional location analysis, co-branding and brand-extension licensing,

or building systems for improving internal communication Any or all ofthese topics are appropriate for one meeting or for discussion on a continuingbasis The strategic planning meeting could be led by an outside facilitator,such as an industry expert, or by the franchisor’s senior management team

A model agenda for a general strategic planning retreat is set forth below

Model Strategic Planning Meeting Agenda

I Evaluating Our Strategic Assets and Relationships

1 Overview

❒ Goals and objectives of the meeting

❒ Key trends in domestic and international franchising

2 Assessing the Strengths of Our Franchise Relations

❒ Franchising state of the union

❒ Common critical success factors by and among our franchisees

3 Evaluating Our Team

❒ Code of values–reality and practice

❒ Motivating and rewarding employees

❒ Protecting the knowledge worker

❒ Providing genuine leadership

4 Our Strategic Partners

❒ What do we expect from our vendors and professional advisors

❒ What can we do to enhance the efficiency and productivity ofthese relationships

❒ Building the national accounts program

❒ Do all of our strategic relationships truly provide mutual reward

5 Our Targeted Customers

❒ Identifying and dealing with the competition

❒ Customer perceptions of quality and value

❒ Franchisor-customer communications

❒ Customer satisfaction surveys

❒ Exploring two-tier marketing strategies

II Asset-Building Strategies

1 Building and Leveraging Brand Awareness

❒ Building overall brand awareness

❒ Brand leveraging strategies

❒ Building an arsenal of intangible assets

2 Co-Branding and Strategic Alliances

❒ Identifying goals and objectives

❒ Targeting and selecting partners

❒ Structuring the deal

3 Shared Goals and Values

❒ Enhancing intra-company communications

❒ Building trust and respect

4 Role and Value of Technology

❒ How technology is changing the way we work and consume ucts/services

prod-❒ The impact of technology on recruiting, training, and supportingfranchises

❒ The impact of technology on how our franchisees will markettheir products/services to targeted customers

5 Development of Branded Products and Services to Strengthen nue Base

Reve-❒ Business training and assistance resources for clients

❒ Home cleaning and refinishing products

❒ Co-branded products and services (e.g., securities sales, financialplanning, home improvement and remodeling, etc.)

❒ Affinity/group purchasing programs

The strategic planning process should develop, foster, and communicate aseries of good habits and best practices that the franchisor’s managementteam follows as part of its daily, weekly, and monthly routine Some of thesegood habits are listed in Figure 12-3.

Figure 12-3 The seven habits of highly successful franchisors.

1 An ability to adapt to challenges and changes in the marketplace

• How do we react to inevitable and constant changes in the environment?

• How well do we plan in advance, anticipate change, and face the reality of what’s really happening

in the trenches?

• Do we really listen to our franchisees?

2 A genuine commitment to the success of each and every franchisee

• A chain is only as strong as its weakest link.

• How is this commitment demonstrated?

• Is this how our franchisees truly perceive our commitment?

3 A culture committed to overcoming complacency

• Are we committed to research and development?

• What steps are in place to constantly improve and expand our systems and capabilities?

• How quickly do we abandon a failing franchisee?

4 A teamready to break old paradigms

• Are we committed to thinking outside the box?

• What recent examples do we have where creative thinking solved a problem or created a new opportunity?

• Are we using computer and communications technologies such as email, intranets, interactive computer training, and private satellite networks to help us support and communicate with our franchisees?

5 A total devotion to excellent customer service

• What systems do we have in place to ensure excellence in our interactions with targeted home and business customers?

• Do we have a procedure for gathering feedback and reacting to problems in the field?

• When is the last time we spoke directly with our franchisees’ customers?

• What are we doing to educate our targeted customers on quality and product/service differentiation issues? How can we achieve ‘‘Good Housekeeping Seal of Approval’’—type status with our custom- ers (e.g., known as setting the standards for quality)? What can we do at the community/grassroots level to promote and enhance this image (e.g., controlling and enhancing the customer’s buying experience)?

• Do we treat our franchisees as our customers?

6 A commitment to taking the time to truly understand and analyze the economics of the core business (by all key players in the organization, not just the CFO!)

• Does the current franchise fee and royalty structure make sense? Is it fair?

• How often are royalty and other financial reports truly reviewed and analyzed? Are key observations and trends shared in the field?

7 A bona fide understanding of the key factors that make our franchisees successful

• What are the common characteristics of our top 20 percent franchisees in each division?

• What can we learn from these common characteristics?

• What can we do to recruit more candidates with these same characteristics and skill sets?

The end result of an effective strategic planning meeting is to develop alist of specific action items Some action items may be able to be imple-mented right away and some may take some time Here is a list of specificaction items that may result:

1 Consider the entry into new domestic and international markets Youcan start with our neighbors to the North and South Many of you asfranchisors are currently exploring opportunities in markets such asCanada, Mexico, and South America due to the close geographic proxim-ity to the United States

2 Reexamine your vertical pricing structures and strategies in light of the

recent Supreme Court case, State Oil Co v Khan,* which changed the

ground rules for suggested retail pricing by applying a ‘‘rule of reason’’test to vertical price restraints The Supreme Court ruled that a manufac-turer or supplier does not necessarily violate federal antitrust law byplacing a ceiling on the retail price a dealer can charge for its products

It remains illegal, however, for manufacturers to impose minimumprices on dealers

3 Consider implementing various types of multi-unit development gies

strate-4 Consider alternative territorial penetration strategies such as kiosks, ellites, carts, mini-units, seasonal units, limited service units, in-storeunits, resorts units, military base units, and related alternative site selec-tion strategies

sat-5 Consider joint ventures with other franchisors or nonfranchisors andcomplementary but noncompeting markets This could include joint sitedevelopments, such as in the coffee and muffin industries, or automobilemini-malls and other related operational joint ventures Many food-related franchisors are actively developing co-branding programs as avehicle for growth and new market penetration

6 Be aggressive and proactive in commercial leasing strategies Considersubleasing and turnkey development strategies, stricter site selection cri-teria to improve failure rate, and the financial performance of each fran-chisee

7 Take a hard look at your financial management practices to avoid the

possibility of liability under the Meineke case.† Make sure that

advertis-* State Oil Co v Khan et al., No 96-871 (S Ct Nov 4, 1997).

† In Broussard v Meineke Discount Muffler Shops, Inc., 2 Bus Franchise Guide (CCH)

11,125 (DC N.C 1996), a federal judge in Charlotte, North Carolina, awarded franchisees

$601 million in damages—the largest award ever in a franchisor-franchisee dispute In this class action, the franchisees accused the franchisor of taking more than $31 million from advertising funds dating back to 1986 The franchisees contended that the fran- chisor took additional fees and commissions from the advertising account and negotiated volume discounts for advertising, but took the discounts for itself The franchisees also alleged that the franchisor violated North Carolina’s unfair and deceptive trade practices act, committed fraud, and breached its fiduciary duty to franchisees by, among other things, using advertising funds for improper purposes such as settling a lawsuit, paying the franchisor’s business expenses, and advertising for prospective franchisees After a

ing contributions have been segregated to avoid potential claims by chisees and other financially related ligitation techniques.

fran-8 Reevaluate your internal and external management team Get rid of nal deadwood and don’t be afraid to demand more and better from youroutside advisors Continue to evaluate your management team for anyindividuals who may be engaged in a course of action that is unproduc-tive, hostile, or harassing to your current or prospective franchisees Askyour outside advisors, ‘‘What are you doing to help us grow and do youtruly care about the future direction of our company?’’

inter-9 Cleanse the baseless rabble rousers and nonperformers from your chise system These negative influencers spread like wildfire Put thesefires out while there is still a spark and not a flame It is important toseparate the good constructive criticism and proactive franchisee fromthe just plain ‘‘whiners’’ whom you will never satisfy

fran-10 Build up your arsenal of protectable and registered intellectual property(e.g., trademarks, copyrights, trade dress, etc.)

11 Be proactive in creating franchisee advisory councils and other methods

in improving franchisor/franchisee communications to maximize chise relationships Bear in mind that happy franchisees keep litigationcosts down and new franchise sales up

fran-12 Search for new markets and methods to find new franchisees Be creativeand untraditional Try new venues and places where the other fran-chisors are not targeting

13 Venture into the world of being a product and service provider to yournetwork of franchisees These activities should be subject to applicableanti-trust laws It could be quite lucrative, provided that you are withinlegal boundaries, you are not too greedy, and properly structure the eco-nomic relationships These products and service provider relationshipscan be done directly or through joint ventures with third-party suppliers

New cases such as Queen City, 1997 WL 526213 (3d Cir August 27,

1997), discussed in Chapter 4, may open up a new door for you in thisarea

14 Get active in industry groups and lobbying efforts that may affect theoperations or profitability of your franchisees’ businesses

15 Use current and developing computer and communications technologies

to enhance franchise sales and support, to gather demographics, to vide training, and to facilitate communication by and among fran-chisees A franchisor’s failure to take advantage of these developmentsalong the information superhighway could be detrimental These tech-

pro-seven-week trial, the jury found the franchisor and other defendants (including three corporate affiliates and three individual principals of the companies) liable to the class

of over 900 franchisees and awarded $197 million in compensatory damages The judge trebled the damage award and added $10.1 million in interest, bringing the total award

to $601 million The parent company, GKN Plc of Britain, said although it plans to appeal the federal court’s ruling, it had already amended its 1996 earnings report by making provisions for $435 million in exceptional charges.

nologies include significantly faster microprocessors, robotics, smartcards, voice-activated and wearable hardware, Intranets and electronicmail, video-conferencing, private satellite networks, virtual reality on-demand publishing, enhanced electronic commerce, and integrated digi-tal communications, which will all permanently change the way we in-teract with our franchisees and the manner in which our franchiseesinteract with their customers.

16 Develop an internally generated strategic growth plan This plan shouldhave clear and attainable objectives Then really use it Do not let thegrowth plan sit around and collect dust Understand the common finan-cial management pitfalls that hinder the performance of many early-stage and rapidly growing franchisors

17 Explore alternatives to franchising in certain situations where licensing,distributorships, joint ventures, dual distribution, or some other contrac-tual distribution channel may be more appropriate

18 Motivate your internal team with stock option plans, bonus formulas,and other equity incentive programs These programs will help enhancecustomer service and franchisee relations

19 Reread your UFOC tomorrow as if you were a prospective franchisee Dothe documents convey your company’s philosophies? Do the documentsadequately tell your company’s story? Do they convey a sense of trust,fairness, and reasonableness? Are the documents user-friendly to thereader and to the advisors of the franchisee? Would you buy this fran-chise? You will be able to discover a lot about your UFOC and your abil-ity to use the document as a marketing tool if you reread the document

as if you were buying the franchise

20 Develop a good data-gathering system on the financial performance ofyour franchisees Use this data to compile sample profit and loss state-ments and balance sheets of some of the strong, medium, and weak fran-chisees in the system Circulate these documents, subject of course toconfidentiality and earning claims regulations, among your existing fran-chisees to increase their performance and to point out flaws in their fi-nancial management

In sum, the strategic planning process is a commitment to strive for the tinuous improvement of the franchise system The process is designed toensure that maximum value is being delivered, day in and day out, to thefranchisor’s executive team, employees, shareholders, vendors and suppli-ers, and of course, its franchisees It is about not being afraid to ask: Whereare we? Where do we want to be? What do we need to do to get there? What

con-is currently standing in our way of achieving these objectives? It con-is aboutmaking sure that the company takes the time to develop a mission statementand define a collective vision and then develops a series of plans to achievethese goals Executives must stay focused on these objectives and provideleadership to both the balance of the franchisor’s team and to the franchisees

as to how these objectives will be achieved The focus must be on brandequity, franchisee value, customer loyalty, and shareholder profitability Theguidelines and protocols for internal communications must encourage hon-esty and openness, without fear of retaliation or politics