As compared to foreign business markets, franchising has lately gained momentum in India. But since then, it has proven to be an efficient and effective business model for entrepreneurs that are willing to establish their career in the Indian business ecosystem.
Franchising has been a trendy topic for a long time now in India, attracting business owners to come and invest in this model. While having its own way of operation and challenges, this business model has managed to bring many aspiring entrepreneurs under the same umbrella.
What exactly is a Franchise Business?
A franchise business is a model where organizations hand over their working operations to some different potential investors in order to run their company in different locations. These investors use the brand’s name and an image along with other components for establishing the franchise outlet.
In simpler terms, a franchise business could be considered as an extension of an existing successful business. This model is much appreciated by entrepreneurs that are willing to grow and expand their business in different territories.
Exercises Required in Starting a Franchise Business
Similar to a coin, a franchise business has two sides that need to be understood before investing in this business model. Most investors just see the success a brand experiences through franchising and decide to invest in the model. But a lot of hard work and efforts might await for you on the other side as there are different exercises that need to be done in order to start a successful franchise business.
Mentioned below are some common exercises:
O You need to be ready with a certain amount of capital or fee which is required to buy the businesses’ right, methods, etc. Franchisees need to pay these before initiating their franchising journey.
O Once you are done with purchasing the rights, franchisees are now allowed to use brand’s name, image, logos, slogans, etc for generating revenues.
O A franchisee might also be allotted with specific locations for initiating their business or offerings.
O Then comes an agreement which defines the time period for which the franchisees are associated with the respective brands. Often, the tenure is around 5-10 years which can further be renewed.
O This exercise completely depends on brands to brands. It talks about royalty fee or payment which franchisees need to pay to the franchises. In fact, there are many brands available in the market that doesn’t require any royalty fee.
O Lastly, it’s time to sign the contract between a franchisor and franchisee.
Remember that the idea of establishing an independent business might sound very exciting but the chances of survival are very slim. Therefore, it is suggested to invest in a franchise based business model that can help you achieve your entrepreneurial dreams without taking any major risks.
