Franchising Offers Huge Development Opportunities
7 December 2010
Read by 1575 persons
Franchising is not a new concept in Tunisia, but establishing a legal framework has helped to draw attention to this mechanism as a tool for economic development. According to Béchir Mihoubi, an international franchising expert and CEO of the American consulting firm "FranCounsel Group", the development of franchising in a given country is a sign of modernization and openness. Tunisia, which has long been committed to opening its economy to the international market, should further strengthen this commitment by attracting foreign franchisors. This will enable it to learn about the concept and subsequently create its own franchises.
Webmanagercenter: What opportunities does franchising offer for Tunisian businesses and the Tunisian economy in general?
Béchir Mihoubi: Franchising is a specific concept where a product is distributed and sold to consumers according to precise rules. Its main distinguishing feature is that it is a concept based on a transfer of knowledge between the franchisor (the concept holder) and the franchisee. The latter must be trained and initiated and receive continuous support from the franchisor. This transfer is also based on concept management, respect for standards, and intellectual property. Franchising is a modern tool for distribution and sales because it allows the marketing of services and products in an increasingly busy society.
It thus meets the needs of consumers by marketing reliable products sold by reliable franchisees as well. This allows the franchisee to integrate faster into the market as an entrepreneur. Consumers often opt for products and services they have tried and trust. Moreover, it is important to know that it is the consumer who creates this demand for franchising.
Franchising offers enormous development opportunities. Almost anything can be franchised, except for certain activities such as consulting, for example. Today, even home medical assistance, childcare, and housekeeping are activities adaptable to franchising. To succeed with a given franchise, a market study must be conducted, consumer habits and rituals must be studied, and their needs must be explored.
Furthermore, franchising is a driver of development. It has the advantage of creating jobs, modernizing the economy, and creating more refined standards better adapted to consumer demands. Any franchise system requires a sophisticated management system. And the best way to do this is to use foreign franchises. This will allow Tunisians to benefit from the necessary training to then create their own franchise.
What are the conditions necessary for the success of a franchise project?
For the franchisor, it is first necessary to conduct a study of the market and franchisees interested in the project. A good franchisor must be able to transfer know-how, catalog all training processes, listen to franchisees, provide an audit of franchise operations, and above all have the financial means to do so.
For its part, the franchisee must respect the franchisor's instructions and must communicate very often with him. The franchisor is like a teacher. He must issue his instructions and lessons to the franchisee, who himself becomes a student and must always refer to the franchisor in any step he undertakes. This is a relationship of trust that is created between the two and must be maintained.
The decline of several franchises is due to poor management and also to the poor selection of operators who do not know how to manage the concept. This selection operation is very important, whether on the part of the franchisor or the franchisee. In the choice of franchisors, it is necessary to ensure that the concept is well understood, that there is a reliable list of franchisees. It is also recommended to conduct an investigation into the franchisor to guarantee that the supervision will be carried out by experts in the field. Attention must also be paid to financing, which must be substantial enough to successfully carry out the franchising operation. Franchisees are often emotional about certain concepts (or brands) and forget the technical side, which is very important. It is not enough to like the concept because it may turn out to be unviable in the end.
In your opinion, does Tunisian legislation currently favor the development of franchising?
Certainly, progress has been made in Tunisia. However, the most difficult thing for me to understand, as an international expert, is the fact of limiting the sectors eligible for franchising. In my opinion, this could have a negative impact in the long term. For example, most jobs in the United States of America are created in the food sector (restaurants, cafes, fast food). I think that the integration of these kinds of concepts, in the food sector, will allow Tunisians to have the necessary training and to create their own concepts afterwards. Moreover, Tunisia, as a tourist country, should play this card to attract more tourists, which would encourage them to spend more and promote the inflow of foreign currency...
But don't you think that total openness could harm local businesses?
I don't think so. On the contrary, this will encourage local traders to improve the quality of their services and will promote competition in the market. And this limitation could be interpreted as a sign of closure. Countries that set these limits are considered not open to competition. On the other hand, this is likely to discourage other franchisors from setting up in Tunisia. Moreover, the American fast food chain "McDonald's" makes more profit in France than in any other country in the world. In this country, however, openness to foreign franchises has not prevented the development of local businesses. It is, on the other hand, perceived as a sign of modernity and openness.
Based on your experience of the American market, what are the requirements of American companies to set up their franchises in Tunisia?
American companies are particularly demanding in terms of intellectual property protection, a banking system that facilitates the transfer of royalties without too much bureaucracy, and also qualified franchisees.
Based on your participation in the 2nd edition of Tunis Med Franchise, do you think this event has the advantage of promoting the concept of franchising in Tunisia?
I think it's a good initiative, especially since this 2nd edition was marked by the creation of the franchising association, with the aim of allowing the exchange of information and educating Tunisian traders about this concept. Compared to the previous edition, there is a higher number of foreign franchisors who came to present their expertise. This shows that there is interest. These exhibitors are interested in coming to Tunisia in all sectors, I must insist. Tunis Med Franchise should offer a platform for exchange between the different actors in the field and encourage foreign brands to develop their franchises in Tunisia.
Published December 6, 2010
Posted online December 7, 2010
www.webmanagercenter.com
Webmanagercenter: What opportunities does franchising offer for Tunisian businesses and the Tunisian economy in general?
Béchir Mihoubi: Franchising is a specific concept where a product is distributed and sold to consumers according to precise rules. Its main distinguishing feature is that it is a concept based on a transfer of knowledge between the franchisor (the concept holder) and the franchisee. The latter must be trained and initiated and receive continuous support from the franchisor. This transfer is also based on concept management, respect for standards, and intellectual property. Franchising is a modern tool for distribution and sales because it allows the marketing of services and products in an increasingly busy society.
It thus meets the needs of consumers by marketing reliable products sold by reliable franchisees as well. This allows the franchisee to integrate faster into the market as an entrepreneur. Consumers often opt for products and services they have tried and trust. Moreover, it is important to know that it is the consumer who creates this demand for franchising.
Franchising offers enormous development opportunities. Almost anything can be franchised, except for certain activities such as consulting, for example. Today, even home medical assistance, childcare, and housekeeping are activities adaptable to franchising. To succeed with a given franchise, a market study must be conducted, consumer habits and rituals must be studied, and their needs must be explored.
Furthermore, franchising is a driver of development. It has the advantage of creating jobs, modernizing the economy, and creating more refined standards better adapted to consumer demands. Any franchise system requires a sophisticated management system. And the best way to do this is to use foreign franchises. This will allow Tunisians to benefit from the necessary training to then create their own franchise.
What are the conditions necessary for the success of a franchise project?
For the franchisor, it is first necessary to conduct a study of the market and franchisees interested in the project. A good franchisor must be able to transfer know-how, catalog all training processes, listen to franchisees, provide an audit of franchise operations, and above all have the financial means to do so.
For its part, the franchisee must respect the franchisor's instructions and must communicate very often with him. The franchisor is like a teacher. He must issue his instructions and lessons to the franchisee, who himself becomes a student and must always refer to the franchisor in any step he undertakes. This is a relationship of trust that is created between the two and must be maintained.
The decline of several franchises is due to poor management and also to the poor selection of operators who do not know how to manage the concept. This selection operation is very important, whether on the part of the franchisor or the franchisee. In the choice of franchisors, it is necessary to ensure that the concept is well understood, that there is a reliable list of franchisees. It is also recommended to conduct an investigation into the franchisor to guarantee that the supervision will be carried out by experts in the field. Attention must also be paid to financing, which must be substantial enough to successfully carry out the franchising operation. Franchisees are often emotional about certain concepts (or brands) and forget the technical side, which is very important. It is not enough to like the concept because it may turn out to be unviable in the end.
In your opinion, does Tunisian legislation currently favor the development of franchising?
Certainly, progress has been made in Tunisia. However, the most difficult thing for me to understand, as an international expert, is the fact of limiting the sectors eligible for franchising. In my opinion, this could have a negative impact in the long term. For example, most jobs in the United States of America are created in the food sector (restaurants, cafes, fast food). I think that the integration of these kinds of concepts, in the food sector, will allow Tunisians to have the necessary training and to create their own concepts afterwards. Moreover, Tunisia, as a tourist country, should play this card to attract more tourists, which would encourage them to spend more and promote the inflow of foreign currency...
But don't you think that total openness could harm local businesses?
I don't think so. On the contrary, this will encourage local traders to improve the quality of their services and will promote competition in the market. And this limitation could be interpreted as a sign of closure. Countries that set these limits are considered not open to competition. On the other hand, this is likely to discourage other franchisors from setting up in Tunisia. Moreover, the American fast food chain "McDonald's" makes more profit in France than in any other country in the world. In this country, however, openness to foreign franchises has not prevented the development of local businesses. It is, on the other hand, perceived as a sign of modernity and openness.
Based on your experience of the American market, what are the requirements of American companies to set up their franchises in Tunisia?
American companies are particularly demanding in terms of intellectual property protection, a banking system that facilitates the transfer of royalties without too much bureaucracy, and also qualified franchisees.
Based on your participation in the 2nd edition of Tunis Med Franchise, do you think this event has the advantage of promoting the concept of franchising in Tunisia?
I think it's a good initiative, especially since this 2nd edition was marked by the creation of the franchising association, with the aim of allowing the exchange of information and educating Tunisian traders about this concept. Compared to the previous edition, there is a higher number of foreign franchisors who came to present their expertise. This shows that there is interest. These exhibitors are interested in coming to Tunisia in all sectors, I must insist. Tunis Med Franchise should offer a platform for exchange between the different actors in the field and encourage foreign brands to develop their franchises in Tunisia.
Published December 6, 2010
Posted online December 7, 2010
www.webmanagercenter.com
