Franchisee or Channel Partner Working Manual
                                 Fundamental Principle Formula
                              “A BUSINESS OWNER (FRANCHISOR) WHO HAS
                             SUCCESSFUL BUSINESS FORMULA WITH BRAND,
                             PASSES THAT TO A BUSINESS SEEKER OR CHANNEL
                               PARTNER (FRANCHISEE) AND BOTH OF THEM
                              SHARE THE PROFITS OF THE NEW BUSINESS ON
                                       THE AGREED TERMS”
                                              Or 
                          Owned by the company Operated by the Franchise partner
                           Invested by the Franchise and Operated by the Company
             Definition:
             A franchise or channel partner is a type of business that is operated by an individual(s) 
             known as a franchisee using the trademark, branding and business model of a franchisor. In 
             this business model, there is a legal and commercial relationship between the owner of the 
             company (the franchisor) and the individual (the franchisee).
             A  franchise is a license granted by a party/firm/company (franchisor) which owns the brand or 
             trademark or business model to an individual or a corporate (franchisee) to have access to their 
             business proprietary knowledge, process, trademarks/brand , and to sell products or services 
             under their name within a territory or a region allotted by franchisor.
                  To operate under franchisor’s brand/trademark name
                  Usage of franchisor’s trademarks/brand names
                  Operation manual for business plan
                   Training/Marketing support from the franchisor company
                  Software and other operational requirements
                  All other proprietary knowledge and materials
                   .
             Function
             A franchise or channel partner allows you to start or expand your business by selling 
             the rights to use your brand or trademark to other small-business owners known as 
       franchisees. In return, the franchisee pays you regular royalties, usually a percentage 
       of the gross sales of the unit. The franchisee also agrees to follow your proven 
       business model, while you provide training support in areas such as training to staff, 
       marketing and business operations.
       Advantages
         1. Franchising provides benefits for both seller and buyer. For franchisors, the 
           primary benefit is the ability to use other people's money to expand the brand 
           more rapidly than they could either on their own or through investors or lenders. 
           The initial franchise fee and ongoing royalties they collect allow franchisors to 
           build their brand without sacrificing control to outsiders or the pressure of 
           repaying lenders. The fees and royalties are used to fund operations at corporate
           headquarters, train and support franchisees, market and advertise the brand, 
           improve the quality of goods or services, and build the brand in the marketplace. 
           For franchisees, benefits include: a higher chance of success than in a sole 
           proprietorship; shorter time to opening; initial training and ongoing support; 
           assistance in finding an optimal site; the selling power of a known brand; lower 
           costs through group purchasing; use of an established business model; national 
           and regional advertising campaigns; customer lead generation through websites 
           and centralized call centers; and a network of peers (fellow franchisees) to 
           provide advice and moral support through a company intranet, annual 
           conferences, and franchisee associations; and, increasingly, assistance with 
           securing funding.
       The franchising business model affords a number of advantages for both the franchisor and 
       franchisee. The following are the advantages of Franchisor from creating a franchising business 
       model.
       Benefits for Franchisee
       Franchisee enjoys a number of advantage by starting a franchising business than starting an
       independent business. Some of the advantages of starting a franchising business for a franchisee
       are:
       Brand or Trademark Development
       A primary benefit of the franchising process is that it helps to increase your brand's 
       identity and business growth without a large investment on your part. The franchisee 
       is responsible for obtaining the financing to open a unit, thereby assuming the risk if 
       the unit fails. By requiring the franchisee to follow your business model, you also 
       maintain a large degree of control over how the business operates.
       One of the most important advantages of franchising is the right to use an already 
       established trademark. As a franchisee, you are allowed to trade with the name, logo, 
       style, and brand image of a company that’s already built a name for itself.
       This is especially important if you have chosen a reputable company that has achieved 
       a certain level of brand awareness. On the contrary, if you have to start a completely 
       new and independent business, you will have to build that reputation and brand 
       recognition completely from scratch.
       Planning
       According to the Entrepreneur website, there are several steps to follow once you've 
       decided your business is suitable for franchising. First, develop a written business plan
       that includes information such as projected financial statements, as well as your 
       marketing strategy. Also create a franchise agreement that spells out the terms and 
       obligations for you and your franchisees. Next, file any required paperwork to receive 
       state approval. Once your franchise is approved, begin interviewing staff to help you 
       get underway. Now, you're ready to begin to market and sell your franchise 
       opportunity. If you're planning to sell units in the Houston area, use resources such as 
       Business Nation and Cityfeet.
       Expertise
       To start and manage a franchise business, the promoter does not need any experience or expertise.
       The franchisor will provide the training and expertise to successfully operate the business.
       Higher chance of success
       Franchise business usually has a higher rate of success than independent business due to a number
       of reasons. Franchise businesses have well experience professionals backing the business, lower
       branding cost, higher brand reputation, etc., – increasing the chances of success.
       Independence
       Franchise business offers the business owner a chance to operate an independent business while
       enjoying many of the benefits of big business.
       Easier access to capital
       Franchisors typically have a number of tie-ups with banks to provide loans for setting up a franchise
       business. Therefore, franchise owners can have easier access to bank loan through the franchisor.
       Support and Training
       Another benefit of working with this business model is that you can usually expect an 
       ongoing support and training from the franchisor. This means that they will guide you 
       into the right way to begin developing your business, which increases your chances of 
       succeeding.
       In many cases, this support includes administrative and managerial services, as well 
       as Marketing materials and resources.
       Lower risk
       The next benefit of operating a franchise business is that you have a lower risk for 
       failing compared to a newly-established company. Generally, franchises tend to be a 
       more secure investment because they use models that have already been tested (and 
       have succeeded).
       Additionally, banks are more likely to approve a loan for a franchise with a credible 
       reputation other than for starting an independent business
       Potential downsides for franchisees include: lack of independence, from the goods and 
       services they sell to the color of the paint on their walls; mandatory company-wide 
       promotions that may not work in their market (price cuts, new products or services), yet 
       cost money to implement; costly required redesign of their unit(s); and, after signing a 
       10- or 15-year contract, a change in management or ownership that takes the brand in a
       new, unwanted direction.