Re-modeling its franchisee agreement, U S Pizza has designed an innovative franchising model for their operations in India which is expected to balance the risk and the reward between the franchisee and the franchisor.
The decision comes in after an extensive research carried out wherein the company identified a gap in the conventional model where the franchisor would take royalty from the franchisee at every sale level.
In the new franchising model, the franchisee gets an assured share of revenue first, before the franchiser gets his share of royalty. After paying off the franchisee revenue and royalty, the remaining profits are shared equally between both the partners. This entitles the franchisee to be in a higher position in the revenue hierarchy then the franchiser, which is not the case in the conventional model followed world over by F&B companies.
In addition, the company is planning to strengthen its support to the franchisees as well by helping them come up the learning curve by providing all the necessary training and working with them at the outlets itself to reduce the risks involved. Help extended would include- support to the franchisee in logistics and supply chain management, training and audit, marketing, research and development, HR management and also centralized direct sales systems like call centers.