Operational Issues

There are three important operational matters that should be well planned and
delivered as they lay the foundations of a successful partnership. These are:

The operations manual: The initial enterprise, the franchisor, prepares the
conditions. It sets up the procedure. It creates a manual stating the basic social
cause and the detailed way it has managed to achieve its goals. In this manual
every operational aspect is described so that it makes it easy for the franchisee
(the new business that will be created) to follow the steps and reproduce the
results. This manual contains the franchisor’s the specific know-how and it is
valuable for the franchisee.

Specifically, it usually includes:

 An introduction about the social cause, values and philosophy of the

brand name to be franchised
 An outline of the business set up
 A list of products and/or services offered
 A detailed description of everyday activities and the tasks and roles of
each job description
 Administrative procedures and policies
 Training activities provided by the franchisor
 Quality standards and control systems
 Marketing tools and platforms (if any)
 References

The franchise agreement: Is the legal foundation which states the basic rights
and obligations for each party. It is important to note here an important
difference. In commercial franchising the agreement is the main instrument
that regulates the relations of the partners. However, in social solidarity
economy the agreement is solely the official document setting the basic rules
of the partnership. In fact, the relationships that the partners develop
throughout their cooperation is a much more decisive factor for success.

The social franchise agreement can vary significantly in size and scope
depending on the needs of the partnership. It, usually, involves:

 Names of the parties

 The object of the rights granted
 The time that the agreement is valid and its renewal terms
 The location of the franchisee enterprise and the allowed territory
 The obligations of the franchisor
 The obligations of the franchisee
 The amount and of fees and time due
 The permitted usage of the brand name and logos
  Matters of ownership and intellectual rights
 Ways of exit or breach of the agreement

The franchise fees: In commercial franchising the fees that the franchisee pays
to the franchisor usually involves an initial amount and then an ongoing
amount that is calculated as a percentage of yearly revenues. So fees are very
specific there. In social solidarity economy, however, that revenues are still
important, although not the primary cause of a social enterprise existence, the
arrangement of fees payment may vary considerably from project to project.
This depends on the peculiarities of each type of social enterprise and its
specific objectives. It also depends on the distinct needs of the new location
that the franchisee sets its business.

So, it is largely upon the partners to decide the specificities of the fees. Things
that should be taken into consideration when deciding the level and type of
fees is the balance between social and financial aims. Also the alignment of
both parties’ incentives so that each one keeps being driven by the social
objective while gaining enough on the financial one.