Being a successful business now is your choice to take the leap and expand your business in India. So why not adopt the Franchising Model to grow your business? Yes, you heard that right, Franchise Your Business in India via Franchising Process.
When franchising your business, there is a set of processes involved that every business owner should know. Our blog will give you insights into this franchising process, how it works, and what franchising means for every business owner.
Let’s get started.
Know How to Franchise Your Business in India – A Guide to the Complete Franchising Process
You should evaluate your readiness to become a franchisor as the first step. If you want to expand your business into franchising, you’ll have to do some things differently than you have in the past.
You’ll need to put on your salesman hat and convince other entities to buy into your franchise opportunity. Your investors need your guidance and encouragement to succeed, so be there for them.
You should seek out legal and consulting assistance to make sense of the maze of federal and state franchising requirements. It may cost money upfront to create documentation, marketing materials, advertisements, and training programmes.
This is in addition to the normal running costs of your business. You should do the maths to make sure that your franchisees will bring in enough money to justify the costs of setting up and maintaining the franchise system.
Once you have decided to take the next step of becoming a franchisor, here are some crucial steps that will guide you on the franchising path.
Step #1: Designing a Franchise Business Model
Alongside preparing your documents, you need to design a plan of how your franchise model will operate. Here are the key points to include while preparing a franchise plan.
- What will be the franchise fees and royalty per cent?
- Franchise Term, Renewal and Termination.
- The location where you wish to set up the franchise, and each franchise territory rights.
- Term stating if the franchises will purchase the goods and services from you itself.
- Qualification and Franchise Profiling – Jot out what you are looking for in prospective leads.
- Ways you will market your brand to attract potential investors.
It’s important to get these properly because they’ll affect your long-term profits. At first glance, there may not appear to be much of a difference between a five per cent and a six per cent royalty.
However, if numerous franchises generate income, a one per cent decrease in your royalties could result in several fewer zeroes at the end of your royalty checks over time.
Step #2: Submit the legal documents to register yourself as a franchisor.
You must file your franchise agreement and disclosure document once you have finalized them.
Step #3: Hire the right staff.
Selling franchises is a time-consuming endeavor, and you still need to manage your company’s day-to-day operations. Several new employees, dedicated completely to franchise management, may be necessary.
There may be a need for a salesperson who can also act as a point of contact for franchisees and answer their queries, a marketing and advertising expert, and possibly even an order processor and shipper if franchisees will be purchasing inventory from the parent firm.
The cost of labor could be your franchise’s single largest expense category. But don’t make the common mistake of trying to save money by spreading your staff too thin. Put money into a large enough workforce to effectively support your franchise system.
Inadequate training and preparation can render your franchisees incapable of properly implementing your system.
Step #4: Market your brand to attract potential leads.
If you can’t entice business owners to invest in your franchises and run them profitably, then all the systems in the world won’t help you. Potential investors are making a substantial time and financial commitment to purchase your concept.
It could be the most important choice they ever make. To manage a business according to your standards, you are asking someone to invest tens of thousands of rupees and countless hours. You’ll need an engaging narrative and solid data to prove that your company deserves their faith.
Step #5: Extend Support to the other entities.
As a franchisor, your success depends on the success of your franchisees. You need to instruct them on how to manage the company and safeguard your name. You accomplish this through diligent training and constant advertising assistance.
Through rigorous testing and training, we can assure that all our franchises provide the same high-quality service to our customers.
Promotion and marketing your expanding network is essential for drawing in new business at franchise outlets. To achieve sustainable growth, a sizable advertising budget is essential.
Steps to Grow Your Business in India Through Franchising
It’s true that franchising can help your company expand into new markets in India. Before jumping into franchising, however, you should study the local market, regulatory requirements, and cultural norms.
To expand your business in India, consider the following franchising strategies.
- Conduct proper market research – Explore the need for your product or service across India by conducting extensive market research. Find prospective clientele and examine the level of rivalry in the market.
- Create a Franchise Model which is easily replicable – Franchises can be successful if you take the time to develop a detailed franchise model that describes your business’s concept, operations, marketing strategy, and training programmes. Be certain that your business model can easily be replicated by others.
- Get Familiar with the Legal Framework – Learn about the franchise laws that apply in India. Make sure your interests are protected by having a franchise agreement drafted by a local attorney who is familiar with Indian law.
- Make your products appealing to the Indian Market – Make changes to your company’s approach and products to better appeal to Indian consumers. It’s possible that localization is required to connect with the intended audience.
- Seek Potential Investors for your brand – Find franchisees who share your vision for the company, can afford to invest in it, and have the expertise to make it a success. To identify potential partners, you can use advertising, franchise exhibits, or franchise brokers.
- Strategical Expansion – It may be time to consider expanding into other areas or cities within India now that your franchise network has stabilized. Before expanding, it’s important to take stock of the market, the competitors, and the practicality of your operations.
How Does a Franchise Model Work in India?
Franchises in India function in the same way they do elsewhere. A franchise agreement is a contract in which a franchisor offers a license to a franchisee to run a business under the franchisor’s name and with the use of the franchisor’s trademarks, systems, and support.
In exchange for these privileges and assistance, the franchisee pays the franchisor a fee or royalty.
The franchise model in India is broken down into its essential parts and processes below.
- Franchisor – Also the owner of the business. The franchisor is the well-established company that created the business model and owns the trademarks and branding for the franchise. They have been operating their firm well and are now considering franchising as a means of growth.
- Franchises – Also known as the investor of expanding your business. A franchisee is a person or business that signs a contract with a franchisor to use the franchisor’s trademarks and run a franchised business.
- Franchise Agreement – Franchisees and franchisors are bound by the terms of the franchise agreement. Each party’s responsibilities and rights in the franchise relationship are spelt out in detail.
- Franchise Fees – In exchange for the right to utilize the franchisor’s brand and business model, the franchisee often pays an upfront franchise fee. Depending on the franchise, this cost may include orientation, ongoing help, and permission to run a business.
- Royalty Fees – Ongoing royalties or fees paid by the franchisee to the franchisor are typically a percentage of sales. These payments go towards the franchisor’s ongoing services and support, such as advertising, instruction, and advice on running a business.
- Training and Support – The franchisee and their employees receive basic training from the franchisor that covers the fundamentals of running the business, upholding the brand’s values, and satisfying customers. The help provided could be in the form of training updates, business consultancy, supply chain management, or advertising.
- Brand Standards – The franchisee runs a business under the franchisor’s name and must adhere to the same quality guidelines. This safeguards the brand’s reputation by ensuring uniformity across all franchises.
- Growth and Expansion – The franchise business model is frequently employed for rapid growth. Franchisors may have an established strategy for expansion, including specific areas where they hope to launch franchises. Compared to beginning a new firm from scratch, franchisees can reap the benefits of the already-established brand recognition and business systems.
It’s important to remember that franchise operations in India are governed by a patchwork of different laws, regulations, and guidelines. Both the franchisor and franchisee are legally obligated to be always open and honest with each other during the franchise agreement. Before signing a franchise agreement, you should consult with a lawyer or other qualified practitioner.
FAQ’s
Q.1. Is growing my business into a franchise in India profitable?
Franchise expansion can be a lucrative business strategy in India, but there are several considerations that should be considered first.
Q.2. When is the right time to expand my business in India via franchising?
Franchise expansion in India can be a smart way to reach the country’s massive consumer market. However, several aspects must be considered before settling on an optimal moment for this kind of growth, such as market demand, stability of your business, financial strength to grow, legal aspects and more.
Conclusion,
If you are looking for how to give a franchise of your business in India, we at Sparkleminds can help you. Our expertise in various aspects like franchise development, market research, franchisee profiling, marketing and more can help you get to franchising your business successfully in India.
