Franchise route is ideal for your business aspirations
Starting your own franchise business involves a lot of effort. You need to start from scratch and establish the reputation of your business before you can think of earning profits. Franchising is a business model where you can start a business in the name of an already established brand. This allows you to use their brand name, so you need not spend too much effort on brand building. This is a great option, particularly if you work with the top brands.
If the idea of starting a franchise business interests you, read on to know how to go ahead with it.
- Decide the business
The first thing, of course, is to decide the type of franchise business you want to start. There are many franchise options available. For instance, you can open a franchise of Vadilal Ice cream parlours or Domino’s Pizza and run a successful eatery. If you want to operate a franchise that deals in retail business then, you can look at opening a franchise of Reliance Smart Stores or Reliance Digital.
Many of the top brands invite entrepreneurs to work with them as franchisees. You should not open a franchise because a top brand is offering it. The business activity should be something you are familiar with. Opening a Fast Food outlet when you have zero knowledge of how the food industry works is meaningless, so it is recommended to select a business area that you are familiar with and then move ahead.
- Contact the franchising companies
Many franchising magazines and websites will tell you about the franchising opportunities available with them. You can even visit the website of the company or directly contact them. If they already have a presence in your area, then you may not be allowed to open a franchise outlet in which case you. You can look at opening a franchise an outlet in some other nearby area. You should also can look at the competitors in the area and open their franchise business. Contact different franchising companies then research the company and find out how their franchise model works. You can meet other franchisees to find out if the franchise model works well. In addition, Explore options available before you decide.
- Do your research
Another important factor when starting a franchise business is doing a thorough market research. You need to understand the market in the physical location, where you plan to open your franchise outlet. Research the brand’s popularity and acceptance. Research if there is room for one more outlet in the area. Then research the company and find out how their franchise model works. You can meet other franchisees to find out if the franchise model works well.
Find out the procedure involved and most importantly the costs. You may have to pay an upfront fee to the franchising company. You need to find out all the expenses that you would need to incur. Find out everything in advance, including the profit percentage to be shared, to avoid unpleasant surprises.
- Complete formalities
You need to sign an agreement with the franchising company once they approve your application. You then need to take a building on rent or lease where you will run the business. You have to start your own company, which would enter into an agreement with the franchising company. Complete all legal formalities, including obtaining licenses from local authorities. If you need financing, then the franchisor may be able to help you get a loan, else you can get it from a bank.
- Start the franchise
To start the franchise outlet, you need to ensure the outlet is ready for operations. This includes construction work, interior decor, hiring employees, and training them. The good part about this is that by going down the franchising route the franchisor will help you with all of this. You can then do marketing activities in your location and then launch your businesses. Remember that you will get assistance from the franchisor at every stage so your risks are mitigated.
A franchisee model though looks good on paper but is actually a cumbersome job. Right from signing the contract with the franchisor until the inauguration of your store involves lot of paper work and legal hassles. Given the amount of corruption involved in our country, a person planning to take the franchisee route has to shell out a fortune to make things work without impediments.
With all the hard work involved, it is an uphill task to open a franchised outlet of any brand whatsoever. However, the result is very rewarding since the hard work will pay off in one way or the other. For instance if you are opening a franchised store for a leading brand then there may be a possibility that it might give you handsome returns within first few years of its operations, or else your return on investment might get delayed due to severe competition in this field.
Whatever may the outcome, starting a franchise is a brilliant idea to carry forward a company’s product and services to prospective customers and make a company’s brand a success. Not every franchise model succeeds in its endeavour and there has to be intricate planning and execution right from the beginning until the end in order to make it a success.
There are several brands world over offering tailor made solutions to open a franchise business. Multiple franchise models can be created for a leading brand within the minimum possible time given the fact that the terms and conditions are similar in all franchise models.
Franchise business was an unknown term few decades ago. However, with the arrival of multinationals and opening of the global economy, the term has gained prominence significantly. Today there are thousands of franchise businesses running successfully throughout the world.
Even our country has several leading brands having their franchise model running successfully. Brands like Reliance trends, Reliance Fresh, Aditya Birla Group’s “More” supermarket and fast food restaurants like Papa Jones pizza, Barbeque Nation etc have been a successful franchise models so far.
The discussion so far has been revolving around how to start a franchise business and the effort that goes into it to make it a grand success. Now we will discuss how we can create multiple franchise models with a single brand or with multiple brands.
A leading company may have several brands within its portfolio. Therefore, it would be prudent to run a separate franchise business for each brand to maintain its identity. A separate franchise unit for each brand improves the brand visibility and enables a customer to shop for his favourite label with ease.
A company having multiple brands within its portfolio can develop a separate franchise model for each brand based on the brand’s image and size. Running a separate franchise business for each brand or label is an ideal business ethic.
Eventually I would recommend a franchise model for any business provided it is easy to setup and free of hassles. A successful franchise model can serve as a perfect example for those who want to start a business through franchising route.