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Compliance & Franchising: How Your Franchisor Exercises Oversight

The matter of inspiring or enforcing compliance within franchising can run from simple to complex for franchisors and franchisees alike.  The scope from simplicity to complexity depends a great deal on the size of the franchise system not to mention the degree to which franchisors opt to maintain a substantial degree of oversight. Regional versus national franchising also alters compliance issues, as well as the company culture of the franchise, services and products offered, and the nature of client relationships.

Industry and government standards set the bar for compliance across various markets both in the US and abroad, though such standards vary greatly depending on the country and jurisdiction.  The security of IT systems is one of the greatest concerns for franchise systems today, particularly larger systems, and it has an impact on local operations at each franchise as well as policies set from the top of the system’s management spanning state and country borders.  The use of independent compliance assessment is one way that franchise leaders choose to handle this issue, seeking the guidance and expertise of separate organizations to review their operations.

When multiple franchise industries fall under one franchise system umbrella, there is no doubt that compliance is a real matter of concern that deserves attention for the security of franchise partners, staff, and especially clients whose information may daily be incorporated with IT systems.  Compliance though can involve internal policies related to the franchisors own interests, such as anything affecting the appearance or integrity of the brand image when interacting with the public.

Potential franchise partners who choose to perform more in depth research about compliance practices of potential franchisors often find they are in a much better position to make final agreement decisions.  Compliance can very well involve altering the degree to which franchisees can regularly make independent decisions about matters such as where to advertise and how to do so in certain arenas, such as various online marketing tools for example.

Finding out more about a potential franchisor’s engagement techniques with franchise partners concerning the augmentation of marketing and branding in today’s increasingly online world is vital.  How does franchise A handle online marketing sites, branding and imaging on these sites, allowance of franchisee freedom to market their location in a local area through these channels, and is this something you can live with and accept without challenges arising?  To what degree is franchise B flexible when it comes to the latest marketing channels and what are the chances that as a franchisee you will feel compelled to take on the role of trailblazer and push ahead?

The goal for franchise systems across the board is increasing the profitability and sustainability of the business (at least these factors figure into most thriving business models) and compliance strategies implement a structure that stabilizes the franchise image and brand across space and time, as well as prevents security breaches, which maintain integrity.  What franchise partners looking to invest must consider is how the franchise agreement and operations manual affect their ability to make their franchise operation a true success considering personal aspirations and today’s changing marketing avenues, from social media, to online campaigns and mobile device point of sale interactions to name a few.

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