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franchisee will abide by a very strict set
of rules. In fact the success of a franchi-
see is greatly dependent upon his abil-
ity to inculcate the standard operating
procedures designed by the franchisor.
The business format fran-
chise arrangement has
the following features:
A customer is drawn to a retail es-
tablishment by the assurance that
she will experience a standardised
product. To achieve this end the fran-
chisor has to ensure that every facet
of the franchisee’s establishment is in
sync with the stipulations laid down.
The agreement executed between the
franchisor and franchisee considers
this aspect sacrosanct and the entire
arrangement is based on the fran-
chisee meeting this requirement.
The franchisee gains tremendously in
that he gets access to the brand rec-
ognition enjoyed by the franchisor. The
brand is an asset built by the franchisor
over a number of years or even decades
and it is the single critical factor upon
which the entire agreement is based.
When the franchisor gives the fran-
chisee permission to use his brand he
will go to the greatest lengths to en-
sure that its value is not lessened by
his franchisee’s actions. Towards this
end, the franchisor will monitor the ac-
tivities of the franchisee and work with
him to ensure their common success.
This arrangement is an ideal one for
entrepreneurs who do not want to start
a business from scratch. A franchise ar-
rangement will give them an opportunity
to start a commercial enterprise which is
based on a tried and trusted model and
has enjoyed success over the years. Of
course, the franchisee has to follow the
FRANCHISING