You are considering international. You will then come up against various challenges. Some countries have specific franchise legislation in place. Other do not or have a code. Sometimes legislation is very strict for instance when it comes to disclosing information. Some countries require a franchise disclosure document (FDD). It is a legal document that is made available to potential buyers of a franchise during the orientation (sales) process. In some countries it is referred to as a Franchise disclosure memorandum (FIM). The document is in different countries but because this by country otherwise we use a format that is usable for most countries and call this the Franchise Information Memorandum.
For FPI to accept a brand having a Franchise Information memorandum available is a minimum requirement. The content is in this document should meet the various requirements in different countries. The FIM usually gets send to the candidates master franchisee at least six weeks before an agreement is formally signed and in some countries has a legal status.
The FPI members strictly adhere to the European Code of Ethics for Franchising and any national Extensions & Interpretations. We keep in mind the most stringent requirements which are used in countries such as Sweden, Belgium and France. A candidate master franchisee has the right to ask for (and receive) an example FIM as soon as it has completed an application form, and this intention. Again the requirements can differ per country and the document can be an online electronic version or online.
Based on especially the standard in the UK where the BFA, the British Franchise Association actively ensures that the content and use of such documents corresponds to what is common within the code. It regulates the release of vital information during the sale of a franchise to a (master) affiliate.
The term “disclosure documents” covers everything that has to do with the provision of sufficient information to a potential master or area developer. The package can include counted brochures, presentations, manuals, financial models etc.. The list of minimum requirements is great.
For international it is inevitable that you are well prepared. That means in addition to having a solid mission and plan you need to need to be ‘packaged’ with the right basic documents, These can be in English but for some countries this might nog suffice.
- Franchise Information Memorandum
- Confidentiality agreement
- Franchise Master Profile
- Financial Model
- Recruitment Brochure Master
- (master) Franchise manual
- Operational manual induction and
- Training programs
- Vision of internationalization this
The complete package depends on the sector where you are in. For instance if your concepts requires lot of equipment you will often also will need to provide a manual for this. If there are specific requirements for training or background of (master) franchisees you might need other manuals or documentation.
Depending on the agreements with your future partner can arrange these documents to be translated in the local language.