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Franchise Business Solutions

If you have any specific questions on franchising your business please ask us here and we would be more than pleased to answer the same. Please note this place is for franchisors only, if you have any queries as an entrepreneur seeking new franchisees or looking at starting a new business visit the Q&A section at franchisebazar.com

1

What is Franchising?

 
Franchising is a way for companies to expand without expending huge amounts of capital. It benefits the Franchisor because the Franchisees use their own money to set up the new outlets. It benefits the Franchisees because they are able to operate under a proven system which is more reliable than starting your own company from scratch. The often-quoted figures say that 80% of new start-ups close down within 5 years, whereas 80% of Franchisees are still trading after 5 years
  1. “Be in business for yourself but not by yourself”.
  2. “Learn from the success and failure of others.”
2

Specifically, What kinds of Businesses lend themselves to Franchising?

 

Virtually every business form you can imagine. Typically, you would think of fast food and restaurants first when thinking of franchising, but franchising covers the spectrum from almost A to Z B from advertising/direct mail to construction, to marriage services, to home inspection, to security systems, to video sales and rentals. Printing and copying services, maid services, computer services, cleaners, real estate, hotels and motels, and travel agencies are excellent examples of successfully applying franchising to established industries.

3

What are the major growth industries in "Business Format" Franchising?

 

As the economy becomes more service and technologically oriented, as more women enter the work force, and as a larger percentage of the population is now becoming employable and are seeking franchise opportunities and as another section of the population grows older, growth areas in franchising are responding to these changes. The industry categories in franchising that are expected to continue to experience rapid growth for the start of the next decade are health and wellness related such as beauty service franchisees, gyms, and alternative healing. Service-related fields such as home repair and remodeling, carpet cleaning, and various other maintenance and cleaning services; all business support services including accounting, mail processing, advertising services, package wrapping and cargo, personnel and temporary help services, and printing, copying & refilling services, automotive repairs and services such as quick-lube and tune-up, and other areas such as environmental services, hair salons, health aids and services, computers, clothing, children's services, educational products and services, and telecommunications services.

While it is important to consider industry growth before investing in a franchise, it is more important to analyze an individual franchise company's track record, keeping in mind that quick growth does not always spell success. A franchise organization that grows too quickly might not have a service team in place to support all of the units properly. Overall, long range trends indicate a steady, solid growth in business format franchising. Some will fall by the wayside, as is natural with any business, but others may well be the "household name" franchise success stories of tomorrow.

4

What is "Business Format" Franchising?

 

Since franchising as a term has been co-opted by various licensing, dealerships, distributorships,
Agencies, MLM and all kinds of pyramid schemes the international franchise community, uses the term business format franchising to differentiate properly structured franchises from others in the marketplace which refer themselves to franchising. Hence its commonly accepted definition is as follows:

Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trade mark/trade name of the franchisor and to make use of an entire package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis.

Again the Franchise India scene is similar with all kinds of businesses calling themselves franchises; hence we go about creating a structured business format franchising system for our clients. We ensure, in business format franchising, the franchisor prescribes for the franchisee a complete plan, or format, for managing and operating the establishment. The plan provides step-by-step procedures for major aspects of the business and, anticipating most management problems, provides a complete matrix for management decisions confronted by the franchisees. The major advantage of buying a business format franchise is that the system, the means for distributing goods and or services, has been developed, tested, and associated with the trademark. As a result, rapid expansion of a successful retail concept can occur more quickly than through company-owned expansion.

5

What types of companies Franchise?

 

It's not just fast food! All sorts of companies, from Fashion Retail to Bathroom Refinishing have successfully used franchising to expand. Whatever your company or your interest or your business, you could consider franchising. You would like to visit our sections that points out the essentials to a successful franchise system 

6

How does a Franchised Chain start?

 

Imagine a store owned by an individual with a particular concept. If the business is successful, the owner may develop a second or third store and hire employees for the day-to-day operations. At that point, if the entrepreneur still wants to expand but prefers not to operate additional stores himself or herself, he or she may decide to "franchise" the store name and business system to an independent business person a franchisee. In return, the entrepreneur may ask for an initial fee and/or a continuing royalty payment based on a percentage of that franchisee's sales. The business is now franchised.

7

Are the "Look-Alike" Characteristics of Franchises a Disadvantage? Don't conumers want variety?

 

The increasingly mobile Indian consumer has come to depend on and appreciate the consistent quality of franchised products and services. Today, no matter where they go, people expect and want the same quality, which is why consumers so often stop at franchised establishments. The ability to easily recognize a franchised store, restaurant or hotel from the outside guarantees there will be no surprises or disappointments on the inside. Quite simply, the public knows what to expect and likes it that way whether it is having its North Indian food at Moti Mahal, its Burgers at Mc Donald’s, Subs at Subway, Groceries at Nilgiris, Watches at Titan, Jewellery at Tanishq, Ice-Cream at Baskin Robbins or their Computer Courses at NIIT, they are all aware of what to expect from franchise brands.

 
 
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