LEGAL REQUIREMENTS FOR ESTABLISHING A FRANCHISE
As with any entrepreneurial activity, creating a franchise network requires starting with certain necessary requirements. We refer, for example, to an analysis of the industry and competitors, the creation of an accurate business plan, and, only when it has been ascertained that there is room to do business, the choice of location, which becomes essential in a franchise, since there is a need to match the range of products or services that are offered, with the characteristics of the people who live in a particular territory or street.
After that, other tools are needed: the creation of the brand, which must be registered, and the creation of a contract in which both the entry fees and royalties that will be asked of potential affiliates are calculated.
After that, to complete the “legal pack” there is to draft the operations manual, which becomes the main tool for passing on the know-how. Only by having all these tools can you then move on to the marketing activities necessary to attract affiliates and increase the consumer base
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Is it true that to develop a franchise network you must own at least three outlets?
No, it doesn't. Law 129/2004 on franchising does not refer to the number of outlets, but instead focuses on the importance of tested and proven know-how.
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Is it true that to start a franchise network you need to have a brand in the market for at least three years?
No, it doesn't. Even one year of operation is sufficient, as long as the model performs well and has a solid foundation.
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Can I develop a franchise network without having registered the trademark in Europe?
Yes, you can, as long as you have registered the trademark in Italy and your proposed affiliation is limited to Italy.
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Can I start a franchise project if I have only filed the trademark?
Typically, an average of 90 days pass between the filing of the trademark and its registration. While waiting for the registration, you can take care of focusing on structuring your business model and affiliate proposal so that you will be ready for the official launch as soon as you get the registration.
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What happens to me if I enter into a franchise agreement, but I don't have an operations manual?
It is strongly discouraged. If you do not have an operations manual, it means that you have failed to put on paper the know-how to be transferred to your franchisees. Without doing so, the pillar holding up your franchise project is missing. Besides that, not having a manual exposes you to legal risks with franchisees, who are dissatisfied and could easily challenge the contract. Read also: Franchise pre-contractual obligations.
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If you want to know more about how to create your own format from scratch or develop your franchise network, book a free consultation.
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