If there’s a business that will give you what you need, isn’t it worth looking for?

If you’ve interacted with us previously or have followed our articles, you’ll know that we are consultants to people wanting to explore franchising as a career alternative. In our profession, we meet a lot of people in various stages of their lives. These people are all different ages, male or female, educated or uneducated, professional, semi-professional, students or retired professional etc We work with the entire spectrum of our adult work force. And they all have one thing in common: they want something better!

It might be for themselves, for their family, for retirement to create a saleable business or to create a business that their children can work into and eventually take over. At least, those are the reasons on the surface. Usually, the hidden reasons are the actual motivators. They can be due to frustration in their current workplace, or the uncertainty that they face in our world of downsizing, rightsizing, or corporate takeovers and consolidations. The small business owner is faced with threat and out of which they are seeking opportunities. All of these may want to get paid accordingly for their efforts, rather than having someone else reap the rewards for their hard work. So they start to look for options.

Franchising is one option. But it’s not the only one. Vocationally, there are three main types of people. At one end of the spectrum is the true entrepreneur. True entrepreneurs probably wouldn’t fit into a franchise system. They are most comfortable taking bigger risks, charting their own course, and doing it all on their own. At the other end of the spectrum is the employee. They need the security of having somewhere to go on Monday morning, of knowing what their responsibilities are, and that there will be a paycheck at the end of the month for the services that they have provided. No matter how unstable the job market may be, or how many times they’ve been bumped, they cannot accept the risk involved in investing their financial resources into a business, but they can accept the risk of future layoffs and all of the financial pain that they can bring.

Somewhere in the middle is the prospective franchisee. There are franchises available that have strict rules to follow, and there are franchises that provide a lot of leeway. There are very expensive franchises, and there are low cost ones. There are franchises available in Food, Retail, Education, and a host of other industries providing products and services. Finding the one that’s best suited to the prospective franchisee is an important process that’s not too complicated, but requires time and effort to pursue. It’s a shame that so many people give up before they even get to this stage. Risk, also known as Fear, Doubt, and Worry, take over. People ambush themselves with their own doubts, but no fact. Friends, neighbours, and relatives ambush them with opinion rather than fact. These are hard things to deal with, and many people can’t overcome them. Hard decisions need to be made with the best information available. Fact, not opinion. It’s a shame when people give up before they’ve actually begun. Oh, they might try looking at newspapers for the opportunities that are coming up or speak to their first circle of influence, their friends, relatives or probably follow a unscientific herd mentality approach that he is successful in this,so shall I . They may initiate a program with a consultant, but when it comes to making a commitment to take a real investigative first step, or following through with a program that’s been started, they freeze. Fear, Doubt, and Worry take over, and they quit. It’s a shame.

The fact of the matter is, self-employment is not for most people. Whether as an entrepreneur or as a franchisee, most people will never seriously entertain the thought of self-employment. It’s a shame that they don’t. With five major industries, and all of the businesses in each industry, and such a wide range of investment levels, there are opportunities available that the average person would never be aware of. And they never will if they quit before they really get started. It’s a shame! What are the costs to looking? Or to following through with a plan of action once started? Usually, no more that just a little time. But the cost to not following through can be the loss of an opportunity of a lifetime.

Franchisee Servicing Department-Sparkleminds

 The right business for you might not be the one you’d guess!

In all of our lives, there are defining moments. There is the moment when we decide where we are going to attend college, the moment when we decide that we’re ready to get married, the moment that we accept our first real job, and the moment we decide that we want to work for ourselves and own a business.

Without a doubt, the decisions that we make at these critical junctures in our lives can, to a large degree, determine the quality of the life we have in the future. These decisions are ones that will not only shape our lifestyle, but also much of the fabric of our life itself!

Sadly, and all to often, the decisions we make at these critical times, turn out to be mistakes. In some cases, there’s simply nothing we could have done differently that would have allowed us to change our decision making, but in other cases there most certainly is.

One of the greatest challenges each of us faces is to make sure that when we have the opportunity to make a decision “of a defining moment” that we make it into a decision that we will be happy with for the rest of our lives.

In plain English, we need to be sure that we do it right! Of course, we should do it right, you think. But often, it’s easier to say than to do.

We all remember the “I told you so” days when someone after the fact, would second guess your decision and point out how foolish you were to make it. Of course, hindsight is always 20-20. However, no one likes to be second-guessed and sometimes we might avoid making critical decisions simply to avoid the risk of having to deal with someone else’s hindsight comments. Here’s some good news! When you make the decision to investigate purchasing a franchised business you have the opportunity to turn hindsight into foresight. If you do your investigation properly, you can give yourself a better chance of making a great decision in terms of the business that you choose for yourself. How, you may ask? The answer is relatively simple. When you make the decision to go into business for yourself, you want your decision to be a good one not just for the short term, but also for the long term, and even for that moment in time when you are ready to sell your business, or transfer control to someone else.

You need to have a plan that will allow you to achieve each of these three steps. So, you should start on the road to making a good decision for yourself by recognizing a couple of things that could badly mislead you, if ignored.

A business that you may like emotionally may actually be totally unsuited to help you achieve your real goals, and therefore may not be a good business for you to own.

A business that on the surface, might not seem appealing to you, may turn out to be the ideal business to help you to achieve you long-term goals.

The key to doing #1 and #2 correctly is having a plan for yourself.
When we work with clients, we suggest to them that the first thing for them to decide is not which business they think they would like to own, but rather what they would like to achieve through business ownership. Ask yourself this question: “If I am successful in the business that I select what do I want my life to be like?"
Once you are able to answer that question, you can “reverse engineer the process”, and go backwards from your destination, to what you should start that will best get you to that destination. Too often, people don’t know where they want to wind up, so they don’t select the best vehicle to get them to where they want to go.
Sure, it all sounds good, but what does it really mean? Let’s take a look at a couple of examples. Let us start by having you ask yourself this question: “How would you like to own a Ice Cream Parlour?" Most people (unless they already know someone who has been in the Ice Cream Business) would probably say that they would not like to own a Ice Cream Business. They would probably say that they think it would be too boring, or that they have no relevant background or experience, or many more reasons like these. Then we ask them two more questions:
Would they like a business that they can eventually operate at a distance, or absentee?
Would they like to either definitely own more than one unit of the business that they choose, or would they at least like to have the option to own more than one unit?
Almost without exception, we are told that multiple unit ownership should be either an option or a certainty, and that someday they would like to back away from their business and have more freedom and independence. We then ask them whether the structure of a Ice Cream Parlour business is a good one to help them achieve their goal? We ask whether the simplicity of the operation, which allows an owner to hire and train employees to do all the jobs (but might be boring for the owner) is an absolute necessity if they want to be able to back away some day? We also ask them how they expect to have more than one location, if the business is so difficult (interesting/challenging) that only they can do it?
When we do this, their lights go on! All of a sudden, these people realize that while they might not like to take in Ice Cream, or for that matter take Courier franchisees, they might very much like to own a Shaadi.com or a McDonalds!

As soon as they separate the business they work in, from the business they work on, their strategy changes. They look at a business as something they are going to manage and grow, and realize that the product that they choose may not be as important as the opportunity that the business can offer.
We know, We know…you’re simply not going to get into a business unless you like what it does. No Problem! With all the choices that exist in franchising today, you will have lots of possibilities to choose from. However, no matter what you choose, we’d be willing to bet you that three years into your business, what will matter most to you, is not what your business is called, but rather whether that business gives you the things you most want to have in your life. If you don’t have the security, freedom, independence, success, recognition, accomplishment, time for family, growth, or whatever else you personally want to have as part of your life, you will not like the business you have chosen. On the other hand, if you do, you most probably will thank your lucky star that you selected that business.

So, how can you make this happen for yourself? Plan ahead. Look at every business you are considering, and compare it to an entry strategy that will allow you to safely enter the world of business, a long-term strategy that will allow you to have the kind of success you desire, and an exit strategy that will allow you to when the time is right, to leave your business. If you pick a business that strongly matches up with the components you have in your three strategies, you will be well on your way to realizing many of your dreams. Of course, you need to make sure that any business you look at is a good business, is in a good industry, where the franchisor is good in that industry. You want to make sure that most of the franchisees are happy, and would repeat their decision to buy that business. You will want to make sure that to the extent you want to grow, there is opportunity for growth. The franchisor should be someone you would like to work with, and you should believe in the “vision” that the franchisor has. You should be able to make as much money as you want and need, and you should feel comfortable with the “corporate culture” of the business you select.

These things should all be givens about any business that you select. Then you should apply your strategy. Which business should you buy? The one that gets you to your goal quickest, fastest, easiest, and best.
You may be very surprised at which one that turns out to be!

Franchisee Servicing Department-Sparkleminds

 Franchising Glocally: Franchising Your Business Correctly From An India Perspective:

It was 7am on a December morning in Kolkata and I was taking the famous yellow ambassador cab (Infact a brand new one, the plastic covers were still on the seats) and was surprised that even today they buy these for close to 5.5 Lakhs and was telling myself how these ‘cabpreneurs,’ utilized franchising in a very crude manner for their growth. When some of the worlds best companies are trying to woo the markets with their latest offerings, we have here an entire community that will swear by the toughness of the car, its low maintenance cost and its return on investment prowess and how well it works in Kolkata. The driver Shanker who was speaking to me came from his hometown 2 decades ago and today owned 14 of these taxis. This latest one was just delivered yesterday and we delved further into how he has grown from being a driver of one of these to owning all of them, while I was being taken to the airport, 30 minutes away.

Shanker the franchisor gives his taxi to a suitable franchisee that runs it for the day and on an average makes Rs 1200. Rs 400 is spent on fuel, Rs 400 is paid as royalty to the franchisor and the balance Rs 400 is the franchisees profit. Anything above or below Rs1200 daily is to the franchisee’s account.

Out of the royalty the franchisor gets he maintains the car (average Rs 2000/ Month) and pays his monthly instalment. (Average Rs 7000/Month) and at the end of the instalment tenure he has a asset .The entire amount that he makes on the daily running then is his profit, a part of it is re-invested in the initial down payment which is close to Rs 1.5 Lakhs. Today as his scales of economies have increased he has an arrangement with a car garage that keeps the cost of servicing the entire fleet very economical (doesn’t use the authorised service centres of the company). They utilize spares which are available in the automobile market which are not the originals recommended by the company, but are branded (not the spurious fake ones) and of tested quality. Infact he was talking of a particular brake shoe that lasted longer than the originals supplied by the company and yet cost him a third lesser than the originals. Guess all that came from experience of running this business for 2 decades. He also went about explaining how he chooses his franchisees and doesn’t just handover the franchisee who is willing to pay him the 400 Rs at the end of the day. He has to be recommended, have driving experience within the city for at least 3-4 yrs and he personally drives around with him for the first few days to analyse if he is a safe driver. All the taxis compulsorily go to the garage once a month for a routine checks up to ensure everything is all right, and if something is to be repaired, then it is done. Also if the garage gives a monthly report of the car, and if that’s bad, the franchisee is marked for it and warned. If the same thing happens again, the agreement is terminated.

So lets analyse the above a little closely:

 Everything Franchisable: Are You Using Franchising?

Franchising is everywhere & touching us in everything we consume, from mobile phones to the clothes we wear, from the insurance policy we buy to the restaurant we go, to the school your kids start studying in up to the franchise teams that we now watch playing cricket & hockey. So if you are selling a product or service look at franchising and see how you could use the franchise tools to enhance your business. Shanker does not understand he is franchising, but if he were to look at it from my eyes and works on a larger canvas, he could have 100’s of such taxi’s that he owns and probably start a journey like what Hertz did. Else he will end up adding a few more taxi’s during his lifetime instead of growing geometrically. Having said that I believe there are 1000’s of such shanker's across the length and breadth of this country who have some very successful business models in place, but do not know how to go about expanding their businesses or for that matter understand the scope and growth they could achieve if they franchise. I am sure it will evolve as we go along.

 Is Your Business Successful and has scope for growth and will make money for all?

Shanker ensures that the franchisee takes home at least 400 Rs every day and Incase he does more, he spends 1/3 of it towards the fuel cost and the balance is all for the franchisee. (That’s the ‘propeller’ for the franchisee to cross the 1200 mark everyday and the market dynamics generally assists them in getting there) In bad days shanker accepts lower royalties, which is adjusted against the better days when the driver can pay them. However the 400-bench mark is set and the flexibility of lower payments at certain times ensures that the daily livelihood of the driver is not affected. At the same time he ensures that he is paid the minimum amount, for him to sustain the entire operation profitably. Everybody is happy and profitable. Hence it is very important to have a profitable operations and franchising will survive only if all of them win. It will not work if the franchisor takes more or the franchise takes more nor will the customer pay more. It is very important to work out the royalties and payments that the franchisor accepts. There has to be a very rational approach to the franchise fee, deposits, investments and all other things that go into the programme. A slight tilt to anybody’s advantage would harm the entire network very badly and everybody would loose. Hence the franchisor is always advised to keep the royalties or payments they seek on a regular basis from the franchisee at proper levels wherein the franchisee also makes money and they are not squeezed out completely. They will also need to understand the market dynamics and be liberal at places and yet have set benchmarks to follow that would ensure the success of the entire programme.

India Centric Franchise Strategy: Do you have a proper franchise programme in place that tackles all issues perfectly?

There is no single India. There are very rich. There are IT/Pharma employees who aspire to global standards and have high expectation. Then there is the aspiring middle class. The self-employed India. The agriculture dependent subsistent farmers. The urban poor. The rural poor. They all have different approaches to consumption. They construct their consumption basket in distinctly different ways .So it is very important to create your ‘own India’ that you would want to serve as a franchisor. I am not sure if shanker would be able to make the same profits that he does now, had he used the authorized service stations or for that matter used company spares. He says on an average they have to get the door rattling checked every few months, and that is done at half the cost with his garage arrangement than what is done in the company showroom. The same would apply for the numerous tinkering and body repair jobs that they have to be done regularly because of driving around Kolkata. Hence every franchisor has to understand the dynamics of his market and work accordingly on the backend to ensure that their costs of operations are right and then pass on the benefits to the franchisee and the consumer. Indian consumers are very value-conscious. They may be poor, but they are not backward. You need to have a proper India centric Strategy and not something that you cut and paste from numerous other sources. We come across a lot of franchisors trying to ape other international franchisor or learn from models across the globe or for that matter their own industry players. (For e.g.: every fast food franchisor wants to duplicate a Mc Donald’s/Subway and tell us that they have everything in place as they have copied and studied these models thoroughly). Infact we come across prospective franchisors that go about booth to booth in a franchise expo collecting kits and then cutting and pasting them into their franchising. We must understand that consumer India has been the source of belied expectations and frustrating resistance to conventional global offerings leave alone the smaller organizations aping these. Never before has any market been so rebellious about what it will embrace and what it will not. Nokia Succeeds. Coke and Pepsi struggle. Honda wins. Mercedes struggles. LG & Samsung walk away with the market. GE appliances doesn’t. Levis lags behind expectations. Nike limps along. Diageo did not make a big splash, MTV localizes, Kellogg’s still struggles. Heinz ketchup doesn’t catch on. Beware! Consumer India offers as much pain as gain and there will be no walkover for global big brands or for any player that don’t think through their strategy from ground upwards. Hence it is very important to have a 360 degree approach to the subject, look internally at what you are offering and its relativity to the market and the entire community that you will address including your suppliers, franchisees, employees and customers, and put a proper scaleable franchise programme in place that will ensure that you grow your business effectively in times to come and it’s a win for all. As C.K. Prahalad puts it brilliantly in one of his articles in Harvard Business Review ‘while it is true that MNC’s will change emerging markets forever, the reverse is also true. Many corporations are beginning to see the opportunity that big emerging markets represent, will demand a new way of thinking………..requiring more than developing cultural sensitivities.’

The Right Franchisee: Do you have the correct franchise recruitment processes and have in   place the correct lead generation programme, entire profile selection and interviewing method predefined and know your ideal franchisee?

Choosing the right franchisee is as vital as having the correct franchise programme in place. Most of the franchisees that come to us ask us this standard question as to what is the ‘return on investment’ and most franchisors tell them that there is no parallel to the ROI they offer. If shanker gave his taxi to a rash driver and even if he did that mistake and did not correct it at the earliest, he would be the biggest loser. Most franchisors do not understand that it is better to say no to a ‘rash driver’ and keep the taxi idle for a while, than to have somebody who is going to spoil the car. In my belief the franchisor is the biggest looser and the amount of time, capital and other resources they would spend on the wrong franchisee would ultimately define the success or failure of their business. The initial 400 Rs per day profitability got would have to be put back with additional money into the same taxi for repairs and other damages and it would be a loosing preposition at the end of the day. The franchisee would at the most loose investments in that one unit and will move on…. but the franchisor would be hurt most. Hence have proper check mechanisms in place to ensure you have the ‘right drivers,’ or else replace them with the right ones, the moment you realize they are not right…. have that inbuilt in your strategy. Have a proper interview and an application process in place and don’t just take the person because they have the bucks or for that matter have 1-2 things that you would need. Have a proper checklist of things you want in a franchisee before you start franchising and say a clear ‘NO’ to the ones who don’t fall within your complete specifications. It is better to manage the difficulties in recruiting the franchisees or for that matter increasing the cost of recruitment rather than having the wrong ones come in, only because you have spent money for an ad release or for participation in an expo.

Hence it is important that you have a fundamentally strong business to be able to tap the Indian market. It is undeniably an important future growth market of the world for most global companies. It is large (it has the fourth largest gross domestic product or GDP in the world in Purchasing Power Parity or PPP terms with over a billion people), it is young (it has 450 million people below the age of 21) and it is just beginning its consumption journey. I also believe very strongly that emerging markets are not like developed markets the way they were in their infancy. They will eventually walk down a different path of their own, as they get more prosperous and you will have to address this market accordingly and grasp your share of consumer’s wallet.

I would also like to bring out the relevance of ‘Qualitative Indian Franchising’ from a micro and a macro perspective, of enabling success for everybody who uses it effectively, not only for a MNC but also even for the next door business owner. Creating opportunities for the millions of entrepreneurs we are known to churn out as a country and for taking a place on the world stage as a developed nation. 

From The Desk Of Amit Nahar                        

Founder & CEO of Sparkleminds Franchise Catalysts.

You could reach him on amit@sparkleminds.com for comments on this article.

  FRANCHISE BONANZA-CELEBRATING FRANCHISING.

Celebrating Franchising could well be another festivity we get used to in the coming times. We will hear great success stories in franchising in the coming years, as this is the Beginning. After a fabulous year of growth, coupled with a never before year for Bollywood and the international acquisitions of Corus and Novelis, we are now shifting gears.

Any which ways franchising is erupting and I have not seen it better than this over the last decade. After unprecedented growth and the franchise business arrival in the Indian market, a real carnival season is unfolding itself. The MNC’S and new concept companies are factually standing up on their toes looking at INDIA as a highly potential target for their future franchise expansion.

In fact enough groundwork and spade works have been conducted, researched. Scaling of price, position, acceptance of products and issues of culture, ethical constraints are now being micro managed.

NOW IS THE TIME FOR EVERYONE TO GET INTO FRANCHISING and build a strong foundation for yourself whether you are seeking new businesses or franchisees or have a business that you want to grow through franchising.

As a matter of fact we interact daily with Entrepreneurial talents lining up to participate boldly seeking lucrative business offers. Consulting companies like ours have become more agile and have refined their deliveries. Event managing companies have mushroomed; advertising companies are doing more billings. The retail markets, real estate have met peek level output and is showing signs of future trends, still exhibiting more flamboyant growth potential. Mushrooming newer concepts in the retail business are the birth of expansive Malls in the country. Infact we receive at least two new enquiries everyday of people & companies trying to see if they could be ‘franchise their ideas’ from a situation a couple of years ago when most small and medium sized business did not even know what franchising was.

There is tremendous awareness that is being created and with franchise expo’s (I know of at least 10 expositions that will be held this year alone across the various cities of this country), there is bound to be a lot of new businesses springing up from different industries. A special mention here of the mega event that just concluded at Delhi on the 10/11/12 March by FAI and Franchise Plus showcasing some of the best franchise platforms available and awarding people and companies who have excelled and contributed to franchising.

With this scenario, the real franchise festive season has started, yester years this business model was still an unheard off subject, few would have discussed and have abandoned.

After all, gone are the days business community impulsively decided on putting their investments in an unfounded business, especially after hearing of franchise business model. They are more than convinced now that franchise business means: assured ROI, time tested and proven methodology at their disposal and consequential growth potential possibilities.

Introducing Franchise business in India has gathered enough material evidence so as to declare its success and apt business platform.  Finding qualified prospective entrepreneurs, business buyers, educating them on the franchise business and convincing them to take up lucrative opportunities for a great challenge.  Identifying the right challenge, people with business acumen and financial strengths, inspiring and motivating them to accept new business interests, changing their lifestyle and approach in doing business is all now becoming a practical reality. Today more than ever people are ready to accept change, they are hungry for information and what the next big idea is or how could I step into the next sunrise industry.

As a matter of fact, the business of franchise is not only a concept of expansion, but also a complete business system with regard to a successful brand, making it viable to its consumers and establishing brand equity & Image. Franchising essentially stands for creating wealth and also a well-grounded pathway to optimize resources. A lot of popular brands today own their credence to successful franchising worldwide and our country is going on a transition phase, disowning negative impressions of foreign business styles and looking at it in a more positive and forthcoming way.

Indian Brands require innovative approach. They are highly successful and have excellent product acceptance, by imbibing franchise route they can effectively stabilize and practice cost effective methodologies in expansion and wide area networking. If well structured and executed the franchise model can pay rich dividends. It is highly cost effective and will serve all ends.

In most developing economies franchising plays a very vital role in eliminating lackadaisical, under productive channels that is widespread in systems. Most Indian products and services will in future travel the franchise route and reach consumers in the best possible manner. What we need to understand in depth here is the totality of the market functions and how we could leverage franchising as a way of business to serve the consumer, the franchisee and the franchiser in addition.

All advanced civilization needs to have global perspectives. There cannot exist any kind of constraints and must do away with restrictions. It would be disastrous and catastrophic if enough thought and innovativeness do not come under our effort and certain degree of acceptance does not prevail.

Today we are not only accepting burgers and pizzas as a way of life in cities and towns, but the gyms and foreign movies have their own impact, hence it is only a question of adoptive attitude and not a question of any resultant impact or any other. Again we will have to adopt the best practices followed worldwide, adopt it to our own conditions and give what our consumers need fittingly.

Startling number of rich class people attribute their emergence into financial freedom to franchising because they perceived great innovative ideas beforehand and built up a franchise system that has made them different today. Great franchisees are those who followed franchiser model and never digressed what has been given to them by way of technology, and systems. They are implementers of systems designed by others.

The doubts and apprehensions people had about franchise business few years back have been diluted specially after the advent of some of the MNC’S and their success in the country is tracked. The system is rather fool proof, As a result Capital markets, banks and other lenders, leasing companies, landlords, the press and much of the public all are looking upon franchising.

Lot of focused study and research has gone into the conceptual stage of franchising and materialization of the business model. It is the legality and governing laws that will undergo changes now and then, so as to accommodate franchise business model, but it is important that these are not too stringent because you need free atmosphere to breathe and grow and if we have harsh legislations, it might just hurt the infants, or might suffocate the growing companies. It is still on a platform of legal scrutiny and of bench marking and protective measures that needs to be carefully incorporated. Having said that we believe that a complex system like franchising is already very well addressed by the existing laws of our country. In trying to compete the race of being a high economy and resourceful country India is now proactive. There exists enough proof and ensuing evidence that our country will thrive on franchise business and show receptiveness in the coming years.

So if you want to become a Amitabh Bachchan or a Sachin Tendulkar or Want to get a Gold medal for India at the Olympics, Franchising is definitely not for you. Everybody else could just dive in, celebrate, enjoy and Profit From Franchising.

From The Desk Of Amit Nahar                        

Founder & CEO of Sparkleminds Franchise Catalysts –A Franchise Consulting Company Specializing in Franchising Solutions for Companies Seeking Franchise Growth and Entrepreneurs seeking New Businesses.

You could reach him on amit@sparkleminds.com or on 080-41512345for comments on this article. 

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