Network management

This encompasses all actions taken by network managers. It is directly linked to the franchisor's obligation to provide assistance to the franchisee. Some examples:

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

Launch support

Support provided by the head office to facilitate the launch of the franchisee's business. This may include providing the elements necessary for creating a business plan, announcing the opening of the new point of sale, or supplying the initial stock.

Network Coordinator

A brand representative who acts as the liaison between the franchisee and the franchisor. As part of their duties, the network coordinator may be responsible for managing store openings, supporting the franchisee at their point of sale, conducting audits, and more.

Personal Contribution

Liquidity that the candidate must possess to obtain a bank loan. The standard ratio is 2/3 for the bank and 1/3 for the franchise candidate.

Supply

In the context of a franchise, the franchisee can source supplies either from their own supplier or from one or more approved suppliers. Generally, the franchisor allows 20% purchasing freedom, but some franchisors require all purchases to go through them to uphold the brand's fundamental principles.

API (Application Programming Interface)

A set of protocols that allows different software or applications to communicate and integrate with one another.

Commercial Lease

A merchant can either rent or own their commercial premises. Generally, the term of a commercial lease is at least 9 years. However, the merchant has the option to terminate it every three years, which is known as a "3-6-9" lease. The lease can also be terminated if the merchant retires, even if the lease has not yet reached the three-year mark.

Business Plan

Whether opening a point of sale or carrying out major work (extensions, decoration, compliance upgrades, etc.) on a site, it is essential to create a business plan to validate the project's feasibility and prepare a financing application to secure bank debt.

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Candidate

An entrepreneur wishing to join a network to become a member.

Concept

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

Concession

Allows the company, known as the grantor, to use the dealer's brand image while also ensuring territorial exclusivity.

Area reservation agreement

An act stipulating that the franchisee will have territorial exclusivity and will not face competition within that zone from another franchisee of the same brand.

Crowdfunding

Crowdfunding allows a concept or project to be financed by multiple economic stakeholders.

Annual financial statements

These provide an initial level of analysis regarding the financial health of your network. They include three documents: the balance sheet, the notes to the financial statements, and the income statement.

Projected income statement

The projected income statement is a document providing a forecast of annual results over a defined period. The outlook is generally for 3 to 5 years.

Confidentiality

The purpose of this clause is to protect the franchisor's expertise. It is essential that this clause be respected by the franchisee and their employees.

Franchise agreement

An agreement concluded between the franchisor and the franchisee. The franchisor grants the right to operate under their brand and use their expertise. This includes the sale of products and/or services intrinsic to the brand.

Contract repository

A contract repository is a digital system that provides a solution for storing and managing contracts, from their inception through to long-term archiving.

Cooperative

A group of businesses owned by their members, sharing common aspirations and economic needs. Members are equal, and a democratic governance model is practiced.

Cooperative and Associated Retail

“An organizational model for retail and service networks (stores, agencies, hotels, etc.) established and controlled by independent entrepreneurs. It is the result of independent business owners in the same trade choosing to pool their ideas, resources, and expertise.” Source: Fédération du Commerce Coopératif et Associé (FCA)

Initial franchise fee

A fee paid by the franchisee to the franchisor for the right to use their brand image, as well as their know-how, support, and more.

Network developer

An employee of the brand who implements the strategy set by the network headquarters.

Leasehold rights

A key element of a business asset, it grants the tenant the right to occupy commercial premises for a specific duration.

DIP – Pre-contractual Information Document

Effective since 1989, this requires the franchisor to submit a pre-contractual information document at least 20 days before the contract signing date. Generally, this 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 may request the following information: average profitability of points of sale, human and technical resources provided as part of the assistance obligation, etc.

Del credere

A clause implying that the brand pays suppliers on behalf of the network members.

Brand / Signage

In the literal sense, it is a distinctive physical graphic element that allows customers to recognize a company or store by its design. In the figurative sense, it is a synonym for the word "brand."

ERP (Enterprise Resource Planning)

There are two definitions:

Also known as an ERP (Enterprise Resource Planning) system, this is software that allows a company to track and manage information from its operational departments.

The term ERP can also refer to "Establishments Receiving the Public," which are structures that members of the general public (those not part of the company) can access during opening hours.

Exclusivity

A contractual clause in which the brand grants the franchisee exclusivity over a specific geographic area. No other franchisee may operate within this perimeter.

Local market analysis

Demographic study of the future franchisee's implementation area.

Subsidiary

A company that possesses its own legal entity (unlike a branch) but is managed by a parent company.

Initial training

A crucial step in the support process, initial training aims to train the new member on the essential rules and aspects of the brand. The duration varies depending on the complexity of the concept. For retail, it may be short, but for restaurant concepts, it can last up to 6 months.

Continuing education

This training follows initial training, meaning the franchisee has already started their business. It helps maintain previously acquired knowledge, provides training on new brand concepts, and builds skills to optimize efficiency and results.

Franchisee

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

Business assets

A physical location used for providing services or making sales.

Franchisor

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

Franchise

Franchising allows a business to adopt the brand image and methodology that have driven the franchisor's success in exchange for royalties.

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IFRS 16

A network may need to harmonize and consolidate financial statements into accounts that comply with IFRS (International Financial Reporting Standards). IFRS 16 provides guidelines for the accounting of lease agreements.

Indexation

As the economic world is in constant flux, indexation allows for the automatic adjustment of service or performance rates based on the economic environment. It is implemented through a contractual measure.

Initial investment

This is the amount required to launch the business. Subsequently, all financial resources will be allocated to fund the needs essential for the site's proper operation.

Total investment

This includes various items such as the entry fee, initial stock, training, opening advertising, and premises layout, as well as non-concept investments like concept fees, security deposits, acquisition costs for the premises, working capital requirements, etc.

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Trademark license

A contractual agreement binding the licensor (or brand owner) to the licensee, allowing the latter to use the brand in exchange for royalties or fees proportional to its use.

Management lease

Lease agreement for a retail location. This is stipulated in the lease contract binding the landlord and the tenant.

Doubin Law

Legislation requiring franchisors to provide the DIP (Pre-contractual Information Document), which contains a certain amount of mandatory information, at least 20 days before signing the franchise agreement.

Flat-rate rent

The rent is set at a fixed amount without reference to size or other characteristics. According to the Court of Cassation, this method is legal.

Variable rent

The rent amount is indexed to the point of sale's turnover. According to commercial lease law, the only condition to be met is that the rent must be determinable. It can be linked in part or entirely to the merchant's turnover.

Indexed rent

A clause allowing the landlord to adjust the tenant's rent based on legal indices.

Notional rent

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

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Brand Identity Manual

These are elements related to the brand's marketing and communication. The franchisee must respect the brand's graphic charter by relying on these elements.

Organizational Manual

Used within the framework of a master franchise, this manual provides the brand's tools and organizational structure to support the stable and sustainable development of the brand internationally.

Master Franchise

Implementation of a franchise model or concept in a given territory for a set period. The two most common scenarios are the introduction of a foreign brand into a country or the expansion of a French franchisor into a foreign country.

Multi-unit franchising

This refers to a member managing several points of sale belonging to the same brand.

Operations Manual

Provided at the end of initial training, this document consolidates the company's know-how as well as its legal obligations. It serves as a reference document for the franchisee and their teams. It is updated in line with the brand's developments.

Systematic preventive maintenance

A document in which the equipment's usage rate is recorded, taking into account both historical data and statistics on incidents involving the equipment in question. A "check-up" can also be planned to verify the integrity of the equipment.

Condition-based preventive maintenance

Occurs following a trigger such as an alarm or indicator light signaling that the equipment requires a check-up or in-depth intervention.

Corrective maintenance:

This occurs when a failure prevents the equipment in question from functioning properly. Professional intervention is required to resolve the situation. It is best to compare different quotes, note the resolution of the incident, and record it in the reference document mentioned under systematic maintenance.

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Cash flow forecast

A table that lists all of a company's monthly financial transactions. It records each transaction on its actual date of receipt or payment.

Quartiles

This involves dividing a value (distribution/salaries/income/turnover) into four equal parts.

Brand royalty

A royalty is a payment that must be made on a regular basis in exchange for the right to operate. Periodic royalties, also known as franchise fees, are intended to pay for the services provided by the network to the member or franchisee after a point of sale has opened.

Advertising fees

The member or franchisee benefits from the overall communication offered by the brand. In return, the brand charges a fee to cover costs. In terms of pricing, this is between 1% and 2%.

Integrated network

This refers to a group of families, investors, or shareholders who control a network of points of sale. These are subsidiaries or branches that belong to the parent company. They are mostly managed by employees of the group. It is generally taken from the pre-tax turnover (ranging from 1% to 15%, but the average is between 5% and 10%).

Voluntary chain

A group of agencies under a single brand. They retain their legal and financial independence, as well as their decision-making autonomy.

Year-end rebate

The year-end rebate is a discount granted by a supplier to its client (distributor or purchasing group). This rebate is granted annually on a fixed date, which most of the time corresponds to the last day of the client's or supplier's fiscal year.

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Seminars

A meeting that brings franchisees together one or more times a year. The goal of these gatherings (or conventions) is to strengthen team spirit and keep the audience informed about the network's development.

Franchise Expo

An event bringing together franchisors to recruit franchise candidates. Brands are present at a booth, often staffed by a member of management, the franchise development manager, and one or more field consultants. This is generally when the franchisor acquires the most candidates. The flagship event is the Franchise Expo Paris.

Distinctive signs

Distinctive features of the network, such as domain names, colors, graphic design/logos, slogans, etc.

Branch

An establishment owned by the parent company and primarily managed by employees of the group.

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TCO

Total Cost of Ownership is a financial estimate that provides an assessment of the costs (direct and/or indirect) of a product and/or service. It allows buyers and owners to estimate the cost.

Contractual territory

Territory in which a franchisee may operate their business without competition from another franchisee within the same network.

Catchment area

Location or territory where the majority of a physical store's clientele is located.