Having spent 30 years in the franchise industry, it is easy for
me to separate the best franchise systems from the rest.
Here is my list of the 20 qualities reflected by the best
They sell products and services which the public wants.
They have excelled at creating a value proposition for their
consumers which their consumers have embraced.
They are either market leaders in creating change or are market
leaders in adapting to change. Even when their products and
services have not changed, their branding changes to keep the
products and services fresh.
They have identified the segment of the market that is their
core and they do not get side-tracked on chasing business outside
of their core at the expense of their core.
Their franchisees identify with, are proud of and support the
brand, products and services as much as they do.
As they appreciate that their franchisees interface most with
the customers, they design and involve their franchisees in
processes which allow them to stay close to the customers.
They appreciate that they are creating one profit pool –
sharing system designed to compensate the risks – one at the
franchisor level and one at the franchisee level. They recognize
that it is in the interests of both to continue to grow the overall
pie while delivering a reasonable rate of return to the franchisee
that operates within the system.
They design a system that works at the unit level as well as
the multi-unit level. They generate investment opportunity within
the system so franchisees prefer to invest within their own
franchise system than elsewhere as evidenced by multi-unit
They recognize the key attributes of successful franchisees and
they seek out franchisees who either have those attributes or are
trained to have those attributes.
They ensure that franchisees understand what they are buying
and what they are not buying.
They have franchise agreements which permit them to exercise
control over the overall system and the individual units but they
exercise their rights and enforce their agreements fairly, with
understanding and significant support befitting the investment and
commitment made by the franchisee.
They ensure that their franchisees understand and are
comfortable with the differences over what aspects of the system
are controlled by which party and how the allocation of these
controls and the overall system works reasonably on behalf of
They realize that franchisees will figure out how they could
make more money if they were allowed to, usually at the expense of
the franchisor. They are transparent as to what each side's
profit silos are and how they co-relate.
They and their franchisees understand that they can make errors
in the exercise of their business judgment and that it is their
right to do so. Despite this right, they appreciate the impact of
their bad decisions on the franchise system and they find ways to
mitigate the impact upon the franchisees of poor decisions.
They utilize compliance personnel and tools as a means of
providing support and guidance. They "police" their
systems to ensure compliance for the benefit of the system as a
whole and not as a means to eliminate franchisees for purposes of
They expand internationally without stealing from the resources
needed to establish, maintain and grow a solid domestic
They understand and plan for the different stages of system
growth as reflected by having longstanding franchisees.
They have succession strategies both internally and for their
They are recognized experts not just in their core business but
in franchising as well.
They promote best practices in franchising so that prospective
franchisees in the marketplace can readily tell the difference
between good systems and ones that are to be avoided.
I am proud to be part of a law firm dedicated to assisting
franchisors in the establishment and development of best practices
which contribute to them being recognized for excellence in
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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