A

Area reservation contract

A deed stipulating that the franchisee will have territorial exclusivity and will not be able to compete in the area with another franchisee of the same brand.

B

Banner

In the literal sense, it is a distinctive physical graphic element that allows the customer to recognize a company / store by its graphics. Figuratively speaking, it is a synonym of the word brand.

Brand image manual

These are the elements linked to the marketing and communication of the brand. The franchisee must respect the brand’s graphic charter by using these elements.

Branch office

Establishment belonging to the parent company, and for the most part managed by employees of the group.

Business Plan

Whether it is during the opening of a point of sale, the implementation of heavy work (extensions, decoration, upgrading…) of a site, it is essential to carry out a business plan to validate the feasibility of the project and prepare a financing file in order to raise bank debt.

C

Candidate

Entrepreneur wishing to join a network to become a member.

Concept

Characteristics of the brand such as its management, organization, marketing, support…

Concession

Gives the company known as the licensor the opportunity to use the dealer’s brand image, but also to have the assurance of territorial exclusivity.

Crowdfunding

Participative financing allowing a concept or project to be financed by several economic actors.

Commercial lease

A merchant can either lease or own the commercial premises. In general the duration of the commercial lease is at least 9 years. But the merchant has the possibility to terminate it every three years, it is then called a “3-6-9” ball. The lease can also be terminated if the merchant retires. And this without the lease having done three years.

Cooperative

A group of member-owned businesses with common economic needs and aspirations. Members are equal and democratic governance is practiced.

Cooperative and Associated Commerce

“Model of organization of networks of points of sale and services (stores, agencies, hotel, etc.) constituted and controlled by independent entrepreneurs. It is the result of the will of independent traders exercising the same trade, to mutualize their ideas, their means, their know-how.” Source: Federation of Cooperative and Associated Commerce (FCA)

Continuing Education

This training comes after the initial training, i.e. when the franchisee has already started his activity. It allows to maintain the knowledge acquired beforehand, to train on the new concepts of the brand, to increase skills to optimize the efficiency and the results.

Conditional preventive maintenance

Occurs as a result of a trigger such as an alarm or warning light indicating that the equipment needs an overhaul or in-depth intervention.

Corrective maintenance :

This occurs when there is a fault that prevents the equipment in question from working properly. An intervention by a professional is necessary to restore the situation. Ideally, a comparison should be made with different estimates, the resolution of the incident should be noted and recorded in the reference document seen in systematic maintenance.

Communication royalties

The member or franchisee benefits from the overall communication offered by the brand. In return, the member or franchisee pays a fee to cover the costs.

Contract area

Territory in which the franchisee can carry on business without competition from another franchisee in the network.

D

Distinctive features

Distinctive characteristics of the network in the form of a domain name, colours, graphics/logo, slogan, etc.

N

Network animation  

It is the entirety of the actions of the animators. It is directly linked to the obligation of assistance that the franchisor has towards the franchisee. Some examples:

Planning and preparing a visit to ensure that each site visited is in compliance with the contract. Structuring of the visit so that all the points are ensured (automated production of the visit report, automatic generation of the action plan and follow-up of the corrective measures, benchmarking of the results)…

Network Developer

An employee of the company who implements the strategy of the network head.

Network facilitator

Representative of the brand who acts as a link between the franchisee and the franchisor. Within the framework of his missions, the facilitator can be in charge of the opening of sales outlets, accompany the franchisee in his sales outlet, carry out audits…

 

P

Personal contribution

Liquidity that the candidate must have to obtain a loan from the bank. The usual ratio is 2/3 for the bank, 1/3 for the franchisee.

PID – Pre-contractual Information Document

Document given to the candidate to the franchise to access the terms of the future franchise agreement.

E

ERP (Enterprise Resource Planning)

Also called ERP (Enterprise Resource Planning), it is a software package that allows the company to monitor and control information from operational departments.

Exclusive

A contractual clause in which the brand grants the franchisee exclusivity for a geographic area. No other franchisee will be able to operate within its perimeter.

F
Franchisee

A business owner who operates a brand through a franchise agreement.

Franchisor

A brand that offers the use of its brand and its knowledge to another company through a franchise agreement.

Franchise

Franchising allows a brand to take over the brand image and methodology that has made the franchisor successful in return for royalties.

Franchise Exhibition

An event that brings together franchisors to recruit franchise candidates. The brands are present in a stand where a member of the management, the franchise development manager and one or several animators are often present. This is when the franchisor usually gets the most candidates. The flagship event is the Franchise Expo in Paris.

Forecasted income statement

The CRP or Profit and Loss Statement is a document that gives a forecast of the annual result for a defined period. The vision is generally made on 3 to 5 years.

Franchise agreement

Agreement concluded between the franchisor and the franchisee. The franchisor gives the right to exploit its brand and its know-how. This includes the sale of products and/or services intrinsic to the brand.

Flat rate rent

The rent is fixed on an amount without reference to size or other characteristics. According to the Cour de cassation, this method is legal.

I

IFRS -16

A network may need to harmonise and consolidate financial statements in the form of International Financial Reporting Standards (IFRS) accounts. IFRS-16 provides guidance on accounting for leaseholds.

Integrated network

This is a family grouping of investors or shareholders who control a network of sales outlets. These are subsidiaries or branches of the parent company. Most of them are managed by employees of the group.

Indexation

As the economic world is constantly changing, indexation allows the tariff for a service or provision to be adjusted automatically in line with the economic environment. It is materialised by a contractual measure.

Indexed rent

A clause allowing the lessor to increase the tenant’s rent according to legal indices.

Initial investment

This is the amount of money needed to launch the activity. Subsequently, all the financial resources will be mobilised to finance the needs essential to the proper functioning of the site.

Initial training

The initial training is an essential step in the support process. Its purpose is to train the new member on the rules and essential aspects of the brand. The duration varies according to the complexity of the concept. In the case of sales, it can be short, but for restaurant concepts, it can last 6 months.

T

Trademark licence

An agreement in the form of a contract between the licensor (or trademark owner) and the licensee to use the trademark in exchange for royalties or fees proportionate to the use of the trademark.

Theoretical rent

An indication of the rental value of the property over a specified period. For example, the notional rent is equal to the monthly rental value multiplied by twelve.

V
Variable rent

The rent is indexed to the turnover of the outlet. According to the law on commercial leases, the only condition is that the rent is determinable. It can be partly or entirely linked to the trader’s turnover.

Voluntary network

Grouping of agencies under a single banner. The branches retain their legal and financial independence, as well as their decision-making autonomy.

L

Local market condition

Demographic study on the implementation area of the future franchisee.

R

Right to lease

A key element of a business, it grants the tenant the right to occupy the business premises for a certain period.

Right of entry

Royalty that the franchisee pays to the franchisor so that this one transmits him the use of its image, but also of its know-how, accompaniment…

M

Management lease

A lease which allows the outlet to be rented. This is stipulated in the lease contract between the lessor and the lessee.

Master Franchise

Application of a franchise model or concept in a given territory with an allotted period. The two most common cases are the integration of a foreign brand in a country or the export of a French franchisor to a foreign country.

Multi-franchising

This is a member managing several outlets belonging to the same brand.

 

O

Operating manual

Delivered at the end of the initial training, this document groups together the company’s know-how, as well as the legal obligations. It serves as a reference document for the franchisee and his teams. It is updated according to the company’s developments.

S

Seminars

A meeting that brings together franchisees once or several times a year. The objective of these gatherings (or conventions) is to reinforce the team spirit and to keep the audience informed about the evolution of the network.

Shop

Physical location where services or sales can be carried out

Subsidiary

Company that has a legal entity (as opposed to a branch) but is managed by a parent company.

Sign licence fee

A royalty is a payment that must be made on a regular basis in exchange for an operating right. The purpose of periodic royalties is to remunerate the services provided by the network to the member or franchisee after the opening of a sales outlet.

Support for the launch 

Assistance set up by the network head to facilitate the launch of the franchisee’s activity. This can be the contribution of elements necessary to the realization of the business plan, the communication of the opening of the new point of sale, the provision of the initial stock…

Systematic preventive maintenance

Document in which the rhythm of use of the equipment is recorded, taking into account both historical and statistical data on the incidents referenced for the equipment in question. A “check-up” may also be envisaged to verify the integrity of the equipment.

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