Network management
This covers all the actions of the animators. It is directly linked to the franchisor's obligation to assist the franchisee. Here are a few examples:
Planning and preparation of a visit to ensure that each site visited is in compliance with the contract. Structuring of the visit to ensure that all points are covered (automated production of the visit report, automatic generation of the action plan and follow-up of corrective measures, benchmarking of results)....
Support for launch
Assistance provided by the network head to facilitate the launch of the franchisee's business. This may involve providing the information needed to draw up the business plan, publicizing the opening of the new outlet, providing initial stock, etc.
Network coordinator
Brand representative who acts as a link between the franchisee and the franchisor. As part of his or her duties, the sales representative may be asked to open a new outlet, accompany the franchisee at his or her point of sale, carry out audits...
Personal contribution
Liquidity required by the applicant to obtain a loan from the bank. The usual ratio is 2/3 for the bank, 1/3 for the prospective franchisee.
Sourcing
Franchisees can purchase either from their own supplier, or from one or more referenced suppliers. In general, the franchisor allows 20% purchasing freedom, but some franchisors require all purchases to be made through the franchisor, in order to respect the brand's fundamental principles.
API (Application Programming Interface)
A set of protocols that enable different software or applications to communicate and integrate with each other.
Commercial lease
A retailer can either lease or own the commercial premises. In general, the duration of a commercial lease is at least 9 years. However, the retailer can terminate the lease every three years, in which case it is known as a "3-6-9" ball. The lease can also be terminated if the retailer retires. And this can be done without the lease having been in force for three years.
Business Plan
Whether you're planning to open a new outlet or carry out major works (extensions, decoration, upgrading...) on a site, it's essential to draw up a business plan to validate the feasibility of the project and prepare a financing file to raise bank debt.
Candidate
Entrepreneur wishing to join a network to become a member.
Concept
Brand characteristics such as management, organization, marketing, support...
Concession
Gives the "licensor" company the possibility of using the dealer's brand image, as well as the assurance of territorial exclusivity.
Area reservation contract
Deed stipulating that the franchisee will have territorial exclusivity and cannot compete in the same area with another franchisee of the same brand.
Crowdfunding
Participatory financing enabling a concept or project to be financed by several economic players.
Financial statements
They provide an initial level of analysis of your network's your network's financial health. It comprises three documents: the balance sheet, the notes to the financial statements and the income statement.
Income statement
The CRP or Compte de Résultat Prévisionnel (projected income statement) is a document providing a forecast of annual earnings over a defined period. The vision is generally for 3 to 5 years.
Privacy
The purpose of this clause is to protect the franchisor's know-how. This clause must be respected by the franchisee and its employees.
Franchise agreement
Agreement between franchisor and franchisee. The franchisor gives the franchisee the right to use its brand name and know-how. This includes the sale of products and/or services intrinsic to the brand.
Contract library
A contract library is a digital system that provides a solution for storing and managing contracts, from conception to long-term preservation.
Cooperative
Grouping of member-owned businesses with common economic needs and aspirations. Members are equal and democratic governance is practiced.
Cooperative and Associated Trade
"Model for organizing networks of points of sale and services (stores, agencies, hotels, etc.) set up and controlled by independent entrepreneurs. It is the result of the desire of independent retailers in the same line of business to pool their ideas, resources and know-how." Source: Fédération du Commerce Coopératif et Associé (FCA)
Right entrance
Royalty paid by the franchisee to the franchisor for the use of the franchisor's image, know-how, support...
Network Developer
Company employee implementing the network head's strategy.
Leasehold rights
A key element of a business, it grants the tenant the right to occupy the commercial premises for a certain period of time.
DIP - Pre-contractual Information Document
Introduced in 1989, it requires franchisors to submit a pre-contractual information document at least 20 days before the contract is signed. Generally, this document is sent 3 months before the signing date. The franchisee must analyze this key document as thoroughly as possible, and the franchisor must include as much information as possible. The future franchisee can ask for the following information: average profitability of sales outlets, human and technical resources within the framework of his assistance obligation, etc.
Ducroire
This clause means that the brand pays suppliers on behalf of network members.
Sign
In the literal sense, it's a distinctive physical graphic element enabling shoppers to recognize a company or store by its graphics. Figuratively speaking, it's a synonym for brand.
ERP (Enterprise Resource Planning)
There are two definitions:
Also known as PGI (Progiciel de Gestion Intégré), this is a software package enabling the company to monitor and control information from operational departments.
The term ERP can also be used to mean "établissements recevant du public" (establishments open to the public), i.e. structures to which outsiders (not belonging to the company) have access during opening hours.
Exclusive
Contractual clause in which the brand grants the franchisee exclusive rights to a geographical area. No other franchisee may operate within this area.
Local market conditions
Demographic study of the future franchisee's location.
Subsidiary
A company that has its own legal entity (as opposed to a branch) but is managed by a parent company.
Initial training
An essential stage in the support process, initial training is designed to teach the new member the essential rules and aspects of the brand. The length of the training varies according to the complexity of the concept. For sales, it can be short, but for restaurant concepts, it can last 6 months.
Continuing education
This training follows on from the initial training, i.e. when the franchisee has already started his or her business. It enables the franchisee to maintain the knowledge he or she has acquired upstream, to learn about the company's new concepts, and to improve skills to optimize efficiency and results.
Franchisee
Business owner who exploits the brand name of a chain through a franchise agreement.
Fonds de commerce
Physical location for services or sales.
Franchiser
A brand that offers the use of its brand and know-how to another company through a franchise agreement.
Franchise
Franchising enables a brand to take over the brand image and methodology that have made the franchisor so successful, in return for royalties.
IFRS -16
A network may need to harmonize and consolidate financial statements in accordance with IFRS (International Financial Reporting Standards). IFRS-16 provides guidance on accounting for rental leases.
Indexation
As the economic world is constantly changing, indexation automatically adjusts the price of a service to the economic environment. It takes the form of a contractual measure.
Initial investment
This is the amount needed to launch the business. Thereafter, all financial resources will be mobilized to finance the needs essential to the smooth running of the site.
Total investment
It includes a number of items, such as the entry fee, initial stock, training, opening publicity, fitting out the premises, but also non-concept investment such as concept costs, the security deposit, the cost of acquiring the premises, working capital requirements, and so on.
Brand licensing
Agreement in the form of a contract between the licensor (or brand owner) and the licensee, enabling the latter to use the brand in exchange for royalties or fees proportional to the use of the brand.
Lease management
Lease under which the outlet is rented. This is stipulated in the lease contract between the lessor and the lessee.
Doubin Law
Legislation requiring franchises to provide the DIP (Document d'Information Précontractuel), which contains a certain amount of mandatory information, within 20 days of signing the franchise agreement.
Flat-rate rent
Rent is based on an amount that does not take into account size or other characteristics. According to the French Supreme Court, this method is legal.
Variable rent
The rent is indexed to the outlet's sales. According to the law on commercial leases, the only condition is that the rent must be determinable. It may be linked in whole or in part to the merchant's sales.
Indexed rent
Clause enabling the lessor to increase the lessee's rent in line with legal indexes.
Theoretical rent
Indication of the rental value of the property over a given period. For example, the fictitious rent is equal to the monthly rental value multiplied by twelve.
Sign royalties
A royalty is a payment that must be made on a regular basis, in exchange for an operating right. Periodic royalties are intended to remunerate the services provided by the network to the member or franchisee after the opening of a sales outlet.
Communication royalties
The member or franchisee benefits from the global communication offered by the brand. In return, a royalty is charged to cover costs. From a pricing point of view, this is between 1% and 2%.
Integrated network
This is a family, investor or shareholder group that controls a network of sales outlets. These are subsidiaries or branches belonging to the parent company. Most are managed by group employees. It is generally levied on pre-tax sales (ranging from 1% to 15%, but the average is between 5% and 10%).
Voluntary network
Grouping of agencies under a single banner. They retain their legal and financial independence, as well as their decision-making autonomy.
Brand image manual
These are the brand's marketing and communication elements. Franchisees must respect the brand's graphic charter, based on these elements.
Organization manual
Used in master franchising, this manual provides the brand's tools and organizational framework for stable, sustainable international development.
Master Franchise
Application of a franchising model or concept in a given territory over 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-franchise
This is a member managing several outlets under the same banner.
Operating manual
Issued at the end of initial training, this document covers the company's know-how and legal obligations. It serves as a reference document for the franchisee and his teams. It is updated as the company evolves.
Systematic preventive maintenance
A document in which the rate of use of the equipment is recorded, taking into account both historical and statistical data on referenced incidents involving the equipment in question. A "check-up" may also be envisaged to verify the integrity of the equipment.
Conditional preventive maintenance
Occurs following a trigger such as an alarm or warning light indicating that the equipment needs overhaul or in-depth intervention.
Curative maintenance :
This occurs when there is a malfunction that prevents the equipment in question from operating properly. Professional intervention is required to restore the situation. Ideally, you should make a comparison with different estimates, note the resolution of the incident and record it in the reference document seen in systematic maintenance.
Cash flow forecast
Table listing all the company's monthly financial transactions. It records each transaction at its actual date of collection.
Quartiles
This is the division of a value (distribution/wages/revenues/sales) into four equal parts.
The year-end discount is a discount granted by a supplier to its customer (distributor or central purchasing body). Each year, this discount is granted on a fixed date, which for the most part corresponds to the last day of the customer's or supplier's financial year.
Seminars
A meeting attended by franchisees once or several times a year. The aim of these gatherings (or conventions) is to reinforce team spirit and keep the audience informed of network developments.
Salon de la Franchise
An event where franchisors come together to recruit franchise candidates. Franchisors have a stand, often staffed by a member of management, the franchise development manager and one or more animators. This is when the franchisor usually gets the most candidates. The flagship event is Franchise Expo in Paris.
Distinctive features
Distinctive features of the network in the form of colorful domain names, graphics/logos, slogans, etc.
Branch
Establishment owned by the parent company, and for the most part managed by group employees.
Contract area
Territory in which the franchisee can operate without competition from another franchisee in the network.
Catchment area
Location or territory in which most of the physical outlet's customers are located.
