Not All Franchises Are the Same
Franchises can be designed in many different ways. In Australia there are 4 broad categories of franchises:
- Fully featured franchises
- Light touch franchises
- Joint venture franchises
- Master franchises
Fully featured franchises
Contain a customised and often complex suite of terms, policies, controls and systems. These franchises give the highest level of control to the Franchisor and the Franchisor takes a more active role in the marketing, training and monitoring activities of franchisee businesses.
Light touch franchises
Contain the mandatory features and requirements to operate as a franchise but the level of controls are often less than a fully featured franchise and the Franchisor often plays a less active or influential role over how franchisees run their business.
Joint venture franchises
Sometimes referred to a “Branchises”, these are the most complex model of all. They involve a partnership arrangement between the Franchisor and Franchisee. This model is often used in circumstances where there are high capital costs to establish the franchise (eg Laser Clinics Australia costs total over $700,000) or where there are specialist retail skills brought by the Franchisor or a desire to partner with a key employee and help transition them to full ownership later (eg OPSM and Secrets Shhhh)
Apply when the Franchisor sells the rights to operate and/or sub-franchise the business model in a particular market. The Master franchisee becomes the “man in the middle” responsible for a specific area and running a franchise network in their own right.