Franchise Valuation Strategy Development

A well-grounded franchise system serves as the cornerstone of all future growth and must reflect your organisation’s goals and objectives while presenting relevant strategies and revenue streams. Issues such as brand positioning, customer engagement, supply chain, resource allocation, risk analysis, adaptability and timely growth need to be considered at this foundational stage of strategy development. How your franchise strategy addresses these considerations will directly affect the business’ potential for growth through franchising.

Franchise financials that reflect the franchise system’s potential profitability both for the franchisor and franchisee should be well evaluated before embarking on the franchisee recruitment process. Understanding what the IP developed and protected within your business is important as it determines the overall value of your business’ potential. It is important to understand how that reflects in your financial projections and what is an equitable franchise fee that would work for both franchisor and franchisee.

Commercial Terms

These refer to the franchise terms associated with the franchise. The franchise fees, franchise term, royalties, investment quantum and store fees are usually listed on this sheet and then further elaborated in a document that precedes the actual franchise agreement, known as the Franchise Agreement Highlights (FAH).

Standard Operation Manuals

The Operation Manuals are the backbone of the operational success of a franchise. By effectively documenting all processes and workflows and by covering topics such as management and operational aspects of the business, the manuals will minimise deviation from the standard operating process that makes the business successful. Often the Standard Operations Protocols (SOPs) include both Outlet Operations documentation and Franchise Management operations.

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