Franchisor plays a vital role in the expansion of business as well as development of business for the franchisee. Since the franchisor has a good exposure of the business and knows how top tackle the issues if they spring up, healthy relations between the two can benefit the both.
Some key franchisor obligations in India are as:
(a) Legal rights for franchisee to do business: The franchisor has to give the legal rights to the franchisee to operate the business in any given area and under the prescribed conditions. This is provided in the form of an agreement, a contract that can be presented before the court incase some infringements happen.
(b) Training: The franchisor has to impart the necessary training to the franchisee. The classical example is that of Mc Donalds which trains the franchisee at Hamburger University. In case the franchisor is located in other state or country, he must make a visit and provide for on-the-spot training program. That is one franchisor obligation in India that cannot be put down.
(c) Business Operations Manual: The operational manual is a key document that is maintained by the franchisor or the master franchisee. It has the necessary information about various business practices and activities. It is updated from time to time and is a great help to the franchisee. The franchisor must provide its operational manual to the franchisee.
(d) Assistance in promoting the business: Most of the brand promotions are taken care of by the franchisor. In certain cases the franchisor even provides the fund for the advertising campaign that is undertaken by the franchisee. It can be done otherwise also; like in the popular advertisements the franchisor can name the individual units or franchisee owners.
These are some of the key responsibilities of the franchisor. The franchisor obligations observed in India may additionally provide technical know-how if it involves any special equipment or infrastructure. Such assistance often happens over long distance communication channels.