4 reasons to hire a franchise consultancy for your Business

Written by Sparkleminds

Franchising can be an excellent way to expand an already successful business. When done correctly, your company may soon follow in the footsteps of leading global brands such as McDonald’s and Domino’s Pizza. When it isn’t done correctly, franchising can be an entrepreneur’s worst nightmare.

This is why having professional support and guidance is beneficial when you enter the world of franchising. A franchise consultant is one of the people you need on your team to ensure the success of your new venture.

4 reasons to hire a franchise consultancy
4 reasons to hire a franchise consultancy

To fully understand why you should not take matters into your own hands when franchising, consider the following reasons for hiring an expert franchise consultant:

  • They have specialized knowledge

One of the mistakes entrepreneurs make when entering the world of franchising is believing that because they have developed a profitable business concept, success in franchising will follow. However, franchising is a completely new and distinct business. Several legal, operational, and strategic processes are involved, and if you’re not careful, you could easily get lost in a sea of competitors and jargon. Hiring franchising experts will be advantageous because they understand the intricacies of the industry. They have the knowledge and experience to provide you with practical franchise advice that will allow you to make sound and informed decisions, saving you time, money, and additional headaches.

  • They can objectively assess the potential of your business

Franchise consultants understand which concepts or models have the potential for growth and profitability because they have assisted numerous entrepreneurs in taking their businesses to the next level. A good consultant will not advise you to rush into the franchising process without first conducting a thorough review of your company’s viability as a franchise, as well as your goals and resources. They will evaluate your business concept based on several criteria, including its replication ability, long-term market potential, track record, and value to potential franchisees.

  • They can assist prospective franchisors in developing a solid infrastructure

A consultant’s most important role is to assist prospective franchisors in developing a comprehensive programme that details the specific policies, standards, and procedures required for a successful franchise business operation. The programme should not only look good in theory, but it should also function properly in practice. Working with franchise specialists will ensure that you can develop a strategic plan and receive the guidance and support you require when you reach the launching or implementation stage.

Your franchise success is determined not by the number of franchisees, but by their quality. A good consultant can advise you on the best ways to package your business as a fantastic franchise opportunity that appeals to the right

type of franchisees. They can assist you in recruiting, screening, and selecting highly qualified individuals who share common long-term goals. This ensures not only the success of the franchise unit but also the overall reputation of your brand.

At first glance, franchising may appear complicated and expensive, but you don’t have to go through it alone—consultants from Sparkleminds can assist. Our team of experts is knowledgeable in all aspects of franchising, from franchise law and operations to marketing and retailing. You will be able to gain a solid understanding of the steps to franchising a business with our assistance, and we will assist you in overcoming any challenges that may arise.

Why should you contact sparkle★minds  for franchising your business?

sparkle★minds  has been in the franchising industry for more than 20 years and has helped over 500+ clients in franchising their businesses. Many prosperous franchise businesses that have used sparkle★mind’s  services have not only received more value than they paid for but have also made sure that they have saved a significant amount of money and time when franchising their enterprise.

sparkle★minds  are a specialized franchise consultancy and do nothing other than franchising. Their success comes from the success of their clients’ franchising and that’s how we are very uniquely positioned.

sparkle★minds  looks forward to helping you with the most authentic franchise development services in India. One session with sparkle★minds  will help you realize why they are considered the top franchise consultants in India and how they could be the perfect match for the franchising consultancy that you seek.

 Connect with us at +91 9844441300 to confirm your time slot, dial us now!

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What is a Franchise System and How Does It Work in India?

Written by Sparkleminds

In India, the franchise industry is growing in popularity. Rather than starting a business from scratch, entrepreneurs prefer to own a franchise. Let’s dive in to know more about what is a Franchise system and how does it work in India? A franchise business, also known as franchising, is one in which an already established business grants another business owner a license to use its name and expertise in exchange for a fee.

Franchise System – India

Franchise System

A franchise system is a business in which an individual or entity known as the franchisee owns a business using another entity’s also known as the franchisor trademark, brand, and business model. In simple terms, a franchisee operates a business for a set period by utilizing the franchisor’s existing brand name and business model.

As a result, both the franchisee and the franchisor have a legal and commercial relationship with one another. In a franchise system, the franchisee sells the franchisor’s products or services while using the franchisor’s trademark and brand name. A franchisee pays a franchise fee and enters into a contract with the franchisor. After all legal formalities are completed, a franchisee may open a new branch of the franchisor’s business.

The relationship between franchisor and franchisee is important because it is the foundation of a franchise business. For a fee, the franchisor allows the franchisee to use his/her business name, trademark, services, techniques, methods, and so on. As a result, it assists the franchisor in expanding the name and brand to a larger group of people and the franchisee in running a low-cost business.

Benefits of Franchise System:

Franchisor:

  • Multiple sources of revenue
  • Brand recognition in new locations
  • Brand Exploration
  • Rapid expansion
  • Higher profits

Franchisee

  • Expert knowledge
  • Brand name
  • Complete business model
  • Minimum staff
  • Less capital
  • Less advertising

Franchise Models in India

The following are examples of franchise models, which describe how a franchise business is run:

FOCO – Franchise Owned Company Operated

In a FOCO business model, the franchisee invests in the property as well as other additional capital expenditures. The franchisor manages the operations and operating costs. The franchisee receives a fixed percentage or share of the return from the franchisor.

FOFO – Franchise Owned Franchise Operated

The franchisee owns and operates the franchise business following the franchisor’s instructions in FOFO. The franchisor determines the outlet’s prices and merchandise. The Franchisor provides the brand name in exchange for a franchise fee for a set period. The franchisee bears the operational costs and must pay the franchisor a percentage of revenue (royalty).

COFO – Company Owned, Franchise operated

The franchisor invests in the franchise business in the COFO model, but the franchisee operates it following the franchisor’s instructions. However, because most companies (franchisors) investing in expanding their business operations prefer to run it on their own, this franchise business model is rare and not common in the industry.

COCO – Company Owned and Company Operated

The franchisor owns and operates the business in COCO. The franchise has nothing to do with franchising. As a result, the franchisor funds the entire franchise, and its employees run it.

Irrespective of the Franchise model chosen, a franchisor and franchisee should have a great relationship in a franchise business to ensure the brand’s success. This relationship is governed by the franchise agreement in India.

sparkle★minds have 500+ franchise successful clients, contact us today & achieve great success in franchising your business. Happy Franchising with Us!

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What are the key subjects in a franchise agreement?

Written by Sparkleminds

Franchise agreements are legal documents that govern the relationship between a franchisor and a franchisee. They typically include franchise disclosure documents (FDDs) that are governed by the FTC Franchise Rule. A franchise agreement includes the franchisor’s and franchisee’s rights and obligations to license and sell a company’s intellectual property and licensing rights.

Examples of businesses that use franchise agreements include:

  • Convenience stores
  • Fast food and chain restaurants
  • Financial advisors
  • Healthcare providers
  • Health clubs
  • Real estate companies
  • Retailers
  • Travel agencies

To operate legally and successfully, you must have a franchise agreement if you intend to license your business for use as a franchise. Otherwise, your franchise agreements may contain pitfalls that will come back to bite you later. Make sure you have the right franchise agreement for your situation and that you understand how it works.

What are the key subjects in a franchise agreement?

How Franchise Agreements Work

A franchisee buys the right to run a business under the franchisor’s established system, playbook, and brand. Franchises have a proven business model, and investors, particularly those with prior experience, want to capitalize on their returns. Expectations and guidelines must be agreed upon jointly by the franchisor and franchisee.

Here’s how a typical franchise agreement negotiation goes:

  1. Meet with the potential franchisee
  • Establish the proposed territory rights for the franchisee’s location
  • Set the minimum standards for performance and associated penalties for missed goals
  • Determine how much you are willing to accept in exchange for your product’s or service’s use
  • Create the advertising standards and intellectual property rights by which the transaction is governed
  • Speak with franchising lawyers to help you translate your notes and conversations into a cohesive document
  • Revisit with the franchisor to review the terms and conditions
  • Schedule a franchise agreement signing for both parties
  • Make copies for the franchisor and franchisee and distribute them
  1. Store your franchise agreement in a safe place and preferably with your other documents

Putting together a franchise agreement is a relatively simple process. However, you must carefully consider legal and financial issues. The idea behind a franchise is to help you make a lot of money and establish your brand. Check that your documents accurately reflect the level at which you operate.

Now, as we have discussed what a franchise agreement is and how it works. Let’s talk about how to draft it and what are the essential subjects in it.

How to Draft a Franchise Agreement?

There are six key subjects in a franchise agreement when finding the right franchise agreement for you:

1. Use of Trademarks

This section defines a critical subject of the contract. This section should include a list of the specific trademarks, service marks, or logos that a franchisee is permitted to use.

2. Location of the Franchise

If either party intends to limit the use of the given trademark to a specific territory, this should be specified in the contract as well.

3. Term of the Franchise

The franchisor may wish to limit the franchisee’s ability to exercise the given rights. This time frame must also be specified so that both parties understand the duration of their rights and obligations.

4. Franchisee’s Fees and Other Payments

The franchisee’s main obligation in exchange for the rights it receives is to pay fees. These fees can be paid once or regularly. Because a franchisee may be required to pay a variety of fees, it is necessary to consult with a lawyer before binding yourself to them by signing the contract.

5. Obligations and Duties of the Franchisor

The franchisee’s main obligation in exchange for the rights it receives is to pay fees. These fees can be paid once or regularly. Because a franchisee may be required to pay a variety of fees, it is necessary to consult with a lawyer before binding yourself to them by signing the contract.

6. Restriction on Goods and Services Offered

As previously stated, by entering into this agreement, the franchisor effectively duplicates its business. So, for the franchisee to provide goods or services of the same quality as the original business, the franchisor must impose some constraints. These constraints may include required quality standards, approved suppliers, authorized advertising, and so on.

If you want to develop a franchise agreement for your business, you should get in touch with sparkle★minds. With more than 20 years in the franchising industry, sparkle★minds has more than 500+ satisfied clients in franchising their business. Connect today with us!

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Should I Franchise My Business? 5 Signs the Answer Is Yes!

Written by Sparkleminds

India is a “sizzling” market for franchising. Take a stroll through any Indian metropolis or upcountry market, and the bustling markets will greet you with the best top brands. While the Indian economy has seen many ups and downs in 2019, the franchise industry has had a busy year. Since 2013, franchising in India has grown fourfold and is now valued at USD 50.4 billion. The majority of this expansion can be attributed to professionals, particularly those with an IT background.

The Indian franchising industry is growing at a rate of 30-35% year on year and is expected to reach USD 100 billion by 2024. With over 4,600 active franchisors and nearly 2, 00,000 outlets operated by nearly 1.7 lakh franchisees, India is already the world’s second-largest franchise market after the United States. Multi-unit franchising has increased by more than 36% in the last two years. However, the Indian franchise market is still in its infancy; the industry accounts for roughly 2% of the national GDP (GDP).

Should I Franchise My Business? 5 Signs the Answer Is Yes!
Should I Franchise My Business?

This industry is growing rapidly, so let’s answer the question should I franchise my business?

Here are the five try-and-convince signs that it’s time to turn your business into a franchise:

1. Current Resource Restraints

Most businesses choose this option when they lack the time, money, or personnel to expand their current operations. Franchising allows a business to expand without incurring new debt.

Franchisees pay the initial costs of launching the business in new locations, so expanding the current business model costs the franchisor very little.

2. Company Credibility

Companies will also choose to franchise if they have a track record of public approval. When your product is recognized as an industry leader, it’s time to take your brand to the next level.

3. Unique Product or Service

Companies with a sustainable advantage benefit from the franchise model. These are the businesses that offer a unique service or product that isn’t going away anytime soon. They (and their franchisees) can distinguish themselves from their competitors.

4. Replicable Business Model

A company that can succeed in the “next town over” is another ideal franchise. Do these businesses have systems in place to manage services on an immediate basis? Your franchise will thrive if you have procedures in place to quickly teach someone how to operate your business model.

5. Demonstrated Profitability

Franchises that can generate a return on investment of 15-20% are generally regarded as wise investments. These businesses will provide a good return on investment for a franchisee.

How to Make My Business a Franchise

If your business reaches these five criteria, it may be time to consider franchising. You can begin by taking the following steps:

Create Your Franchise Business Plan

The first step for a company that decides to franchise is to develop a franchise business plan. These plans specify how territories will develop and how quickly they should expand.

These plans should also outline the staffing and support services that franchisees will have access to, as well as any fees they will incur along the way.

Larger companies’ franchise business plans typically address more complex issues. These plans will address issues such as antitrust disputes and channel conflicts.

Expansion costs are routinely assessed so that franchisors can adjust their growth strategies.

Draft Your Franchise Agreement

Make sure you have a franchise agreement in place before opening any locations to franchisees. The franchise agreement is a contract between the franchisor and the franchisee that outlines each party’s obligations to the other.

Franchise agreements are never identical. They contain specific information about the particular business in question.

Business territories and how credit requests will be handled are two items that may be negotiated in the franchise agreement.

Develop a Franchise Disclosure Document (FDD)

The franchise disclosure document, or FDD, tells prospective franchisees everything they need to know about your business.

This document is divided into 23 sections, which franchisees should read through before signing. These sections cover a wide range of subjects, from trademarks to dispute resolution.

Identify Your Franchise Fees

Before the franchisor and franchisee sign on the dotted line, franchise fee terms must also be specified.

Typically, the initial franchise fee covers the right to use the company name and product. These fees may also include training or other on-site assistance to help the franchise get up and running.

What Are Your Next Steps?

Now is the time to ensure that your business model meets the “franchisable” criteria listed above for your franchisees to succeed. It’s also a good time to speak with a franchise attorney about drafting your franchise disclosure documents.

If you’re still wondering “should I franchise my business?” you can find more information on our website. Create a solid foundation now so that you (and your franchisees) can expand your empire and watch it thrives for years to come. To know more, contact sparkle★minds today!

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Requirements for franchising your business in India?

Written by Sparkleminds

Are you interested in starting a franchise business in India? Before you make an effort to begin the process, we’d like to share some useful information. The section below in this write-up will familiarize you with the necessary requirements and aspects for establishing a growth-oriented franchise business in India. 

Requirements for franchising your business in India?
Requirements for franchising your business in India?

There are a few important requirements for establishing a Franchise Business in India for your company’s growth and prosperity, which are detailed below: 

Essential Requirements for Setting up Franchise Business

Niche Identification

One of the most important tasks for any aspiring entrepreneur looking to enter the business world is to identify a niche. When you finally decide to start a franchise business, make sure to choose a business domain that will serve you well in terms of both sustainability and revenue generation. 

To make an informed decision, it is recommended that you conduct an in-depth market and city-specific research. Remember that trending niches are more susceptible to fierce competition.

Addressing the Formalities

Once you’ve decided on a niche, make sure you obtain legal permission from the Ministry of Corporate Affairs (aka MCA) as soon as you sign the franchise agreement with the relevant company. If the franchise is located outside of Indian Territory, make sure to hire a professional firm to help you overcome the difficulties in the early stages.

Ownership

Take legal ownership of the property once you have met the above requirements. It is recommended that the legitimate witness be arranged during the legal process to avoid any future legal conflict with the franchisee.

Licensing

This is the most important aspect of establishing a franchise business in India. To operate smoothly within the legal framework, you would require a different type of licencing and registration. For example, if you are running a food chain business, you must obtain the FSSAI licence without exception.

Human Resource Requirements

Human resources are also important in the franchise’s business operations in India. As a result, you must understand the number of workers required to support the operation. As an owner, you must also become acquainted with the roles and responsibilities of your employees in order for the hiring process to run smoothly.

Addressing Tax liabilities

Any business owner must be aware of the tax implications. As a result, we would like you to emphasise the importance of understanding the various types of taxes that apply to your business. 

From customs duty to GST, the range of taxation in India is quite broad, so it is critical to understand the layers and be prepared accordingly. During this stage, you can also determine the best way to avoid heavy taxation.

Overseeing Currency Risks

This is essential for entrepreneurs who do business on a global scale. Their initial investment is usually in foreign currency, while their first earnings are in Indian currency. 

As a result, before beginning a business operation, it is critical to gain a better understanding of currency value differences. It will provide accurate profit and loss information.

General Documents required for Franchise Business

The Franchise Agreement and the Franchise Disclosure Document (FDD) are the two main documents that must be drafted in order to establish a franchise business in India.

Franchise Agreement

The franchise agreement serves as a legally binding contract between the franchisor and franchisee. It includes an important clause outlining the duties and rights of the parties involved. The agreement aims to protect the franchise system’s integrity. A good franchise agreement is transparent and concise. This agreement generally addresses the following issues:

  • Initial & ongoing franchise fees
  • Timelines for commencing the franchise for business
  • Franchise territory protections (if applicable)
  • Specifications related to the equipment, supplies, & inventory
  • The term of the agreement for the renewal
  • Rules regarding the transferability of the franchise to a third party.
  • Conditions regarding the termination of the agreement
  • Post-termination obligations
  • Non-compete agreements
  • Min. sales requirements
  • Arbitration for Disputes settlement

Franchise Disclosure Document

A Franchise Disclosure Document (FDD) should be written in accordance with the law. According to the law, the franchisor is not obligated to sell the franchise until the prospective franchisee has received an FDD. 

In India, there is currently no separate law that governs franchised businesses. As a result, franchise agreements are largely contractual in nature, making franchise agreements is extremely important in the business world. 

Furthermore, depending on the nature of the franchise arrangement and the industry in which the franchise operates, several other laws may have an impact on franchise business in India. Essentially, every franchising relationship is a contractual relationship, and thus such business activities fall under the purview of the Indian Contract Act, 1872.

Relevancy of Indian Contract Act for Drafting a Franchise Agreement

According to the Contract Act, a contract is a legally binding agreement. To be legally enforceable, every franchising agreement must ensure compliance with the following criteria. The following are the elements that formed the basis of the contract:-

  • An agreement, i.e., an offer & an acceptance of the offer;
  • Lawful consideration relating to the agreement;
  • Lawful object & purpose of the agreement;
  • Free Consent of the parties to the agreement;
  • Monetary Consideration of the parties to enter into a contract

Conclusion

In a nutshell, a franchise is a strong business model that reduces the franchisee’s liability to face all of the losses that are more common in other business forms. Franchise in India is emerging as a growth-oriented business form for entrepreneurs and startups who do not want to take significant risks up front. 

In India, the franchise is a successful business model. Drafting a franchise agreement is a professional’s job, and it should never be attempted without the supervision of a franchise consultant. As a result, it is critical to remain within the purview of a professional in order to complete the legalities associated with the Franchise business. If you want to proceed with expert intervention for setting up a Franchise business in India, please feel free to consult our sparkle★minds experts.

Over 500 + clients have franchised their businesses and have achieved great business results with sparkle★minds , so why are you waiting? Get in touch with us!

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How to make a Successful Business Plan in India?

Written by Sparkleminds

Most people easily locate a manual on how to draft a business plan by doing some research online or in a bookshop. The success or the quality of the business plan produced does not assure simply using these templates. An effective business plan requires a lot more to be practical and successful, and even more to be genuinely useful. The business owner and leadership rather than the company itself will be the most crucial factor in success when the pieces come together if done properly. 

How to make a Successful Business Plan in India?
How to make a Successful Business Plan in India?

Your business plan needs seven key components to differentiate it from the standard stack of applications and documents printed on home printers that everyone is used to seeing.

1. Research

Your data must be of the highest caliber, if your business is to operate a successful business plan and attract investors. Knowing every aspect of the situation is necessary, not just your processes. For a business plan to be properly developed and communicated, research and analytical thinking are essential. The data used must be accurate, valuable, and objective. However, you’re not writing a novel, so the presentation also needs to be concise. That means choosing the right research to include versus just a brain dump of anything about the company’s situation.

2. Have a Purpose

For what purpose was your business plan written? A guide that details how to operate? A loan or investor pitch? Both? a text from the past? The goal must be clear and definitive. If you don’t know why you’re writing a business plan, the effort will be a waste of time. Knowing also means having a target audience you expect the plan to be ready by. With both defined, it will help dictate what information is included and how.

3. Craft a Company Snapshot

Some refer to it as a company’s profile, while others call it a snapshot. In either case, your business plan needs a section that sums up in a few phrases who your company is, what it does, and what it offers. This should be the same information that one would find if they looked on the business’ website. It’s designed to be quick and digestible mentally because it needs to stick in a reader’s mind quickly, especially as more information is provided later in the plan. If the reader remembers nothing else, he or she will have the profile well entrenched in memory. And that matters when your plan is being considered with others.

4. Detail the Company in Total

Some people solely address the positive aspects and selling factors of their firm in their business plan. That is incorrect. Most readers are reasonably aware of the company’s position in the overall scheme of things. Describe the company’s condition in detail, both good and poor. Include strategies for how weaknesses will be fixed given the appropriate support where there are any. Included in the details should be significant elements like patents, licenses, copyrights, and special advantages that no one else possesses.

5. Write the Marketing Plan Beforehand

A simple mistake made by most businesses is that people think they can write a business plan without knowing first how something is going to be sold. A strategic marketing plan is essential; it shows how your product or service is going to be delivered, communicated and sold to customers. It covers where, when and how much, all the key pieces that later on feed into the financial statement projections in the business plan. No surprise, marketing has to be nailed down before planning out the rest of the business.

6. Be Willing to Change the Plan for Your Audience

Writing just one business plan is another error that people frequently commit. The paper provided to a lender will be considerably different from the one used for internal guidance. Just as individuals have many resumes for various potential employers, smart startups have multiple versions. You should provide tailored business plans and messages to the target audience.

7. Include Your Motivation

Your motivation and goals are the most important component of a successful plan. Why are you making such an effort? Why are you working so hard? Your motivation needs to be a reason that will convince people the business will succeed, through thick and thin. A business needs a mission that drives it, not just selling to make money. Your motivation defined in the business plan is that mission.

Are you ready to start your business? we are here to help you!

sparkle★minds can help you franchise your business both nationally and internationally. It has helped more than 500 businesses in franchising their businesses. So, what are you waiting for? Connect with us today!

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How to franchise a Manufacturing Business?

Written by Sparkleminds

In India, one of the industries experiencing rapid expansion is manufacturing. The “Make in India” programme was introduced by Indian Prime Minister Narendra Modi to promote India’s manufacturing industry and boost the country’s economy internationally. By 2022, the government wants to add 100 million new employment to the sector. 

According to preliminary estimates of the gross domestic product for the first quarter of 2021–2022, India’s gross domestic product (GDP) for the first quarter of FY22 was Rs. 51.23 lakh crore (US$ 694.93 billion) at current exchange rates. In the third quarter of FY22, the manufacturing GVA at current prices was predicted to be US$ 77.47 billion.

By 2030, India can contribute more than US$ 500 billion yearly to the global economy and become a major centre for manufacturing. 

The second quarter of FY22 saw capacity utilization in India’s manufacturing sector rise to 72.0%, according to a poll done by the Federation of Indian Chambers of Commerce and Industry (FICCI), showing a considerable rebound in the industry.

How to franchise a Manufacturing Business?
How to franchise a Manufacturing Business?

As this industry is growing rapidly, let’s talk about how you can franchise your manufacturing business and make your business a brand. 

How to franchise a Manufacturing Business?

A fantastic strategy to accomplish business expansion while reducing the overhead costs associated with opening additional locations yourself is to franchise your manufacturing business. In essence, when you franchise a manufacturing business, you are renting to another businessperson the right to utilise your brand, business model, and standardised operational procedures. The franchisee receives a tested business plan and continuing assistance to help the venture succeed in exchange for the franchise fees and royalties paid to you. Although franchising a manufacturing company might be difficult, it can also be financially and professionally rewarding.

  1. To decide whether your business should be franchised, perform an objective business analysis. Think about if your goodsor service is distinct enough and competitive enough to be profitable in a variety of marketplaces and appealing to many other business owners. Is the company producing a sufficient profit (with high margins) to support growth? Is it simple for another businessperson, managers, and employees to copy the business model? Is the business’s target market substantial enough to warrant many locations?
  1. Formalize your business’s activities into a detailed strategy that is simple to follow. From the time you buy the opportunity until the first year or two of profitable franchise operations, you should cover as many operational facets as you can.
  1. Write a guidebook on marketing and branding strategy. This unique handbook will assist the franchisee in bringing in more clients and building up brand recognition for your company. You must make it apparent how to use and enhance the company’s brand and image as a component of an effective competitive strategy.
  1. Draft your leasing, royalty, and franchise contracts; have a franchise attorney or other expert with knowledge of business entity franchising evaluate these forms.
  1. If franchising your business changes your state tax liability, register your business with the secretary of state. If this procedure applies to your circumstance, you should confirm with your local office.
  1. Register your company with the secretary of state if franchising it affects your state tax obligations. You should verify with your local office if this procedure applies to your situation.
  1. Employ a service and support team to guide your franchisees’ efforts. Franchisee inquiries and quality assurance can be addressed by your service and support team. Set high internal standards for service and demand them. 
  1. Make sure to carefully vet and choose your franchisees before marketing and selling your franchise offer. Keep in mind that their success will determine yours.

Advantages of franchising a business. 

The advantages of franchising don’t solely apply to the franchisee, of course. The franchisor should also weigh the pros and cons before deciding to enter into this business model. First, let’s explore the benefits of franchising that the franchisor can enjoy.

1. Access to capital

One of the biggest barriers to expansion for manufacturing business is the money it costs to expand. And while there are several business loan options, they don’t always pan out. Franchising your business will take some time and money on your end, but it also has the potential to make you a lot of money in the form of franchise fees.

Expanding your business as a franchise allows you to expand with little debt. The business expands as capital becomes available from franchisees instead of taking on debt through loans. The franchisor also shares minimal risk with the franchisee because the franchisee puts their name on the deed for the physical location of the business and lowers the franchises overall liability.

2. Efficient growth

Opening the first unit of a business is costly and time consuming. Opening a second unit can be almost as difficult. When that burden is shared with another business owner, it makes the process more efficient and takes the onus off the initial business owner.

When trying to grow your manufacturing business, starting a franchise can make opening multiple locations a much simpler process.

3. Minimal employee supervision

One of the big stresses as a business owner is hiring and managing employees. As a franchisor, the only support that you have to provide to the franchisee is training and business knowledge. In general, the franchisor has no hand in the management, hiring, and firing of employees.

This minimal employee supervision allows the franchisor to focus on the growth of the business instead of day-to-day operations. Instead of worrying about whether an employee shows up for their shift or not, the franchisor is focused on the big picture for business success.

4. Increased brand awareness

One of the many benefits of franchising is increased brand awareness. The more locations the brand has, the more people who are aware of the brand. And the more these customers come to know and love the brand, the more profitable and successful the brand can be. This increased brand awareness of a multi-location franchise can be highly beneficial to the franchisor and their franchisees—a win-win.

5. Reduced risk 

One of the biggest benefits to the franchisor in a franchise agreement is the ability to expand without an increase in risk. Because the franchisee takes on the debt and liability of opening a unit under the name of the franchise, the franchisor gets all the benefit of an additional location without taking on the risk themselves.

Additionally, the franchisor is often further insulated because the franchise is incorporated as a new business entity, leaving the original business owned by the franchisor as a separate entity from the franchise. A franchise lawyer can help to set up the terms for this type of protection within the franchise agreement.

Connect with sparkle★minds  if you are interested in franchising your  business. Over 500 + clients of sparkle★minds  have franchised their  businesses and have achieved great business results, so why are you waiting? Get in touch with us!

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What is a Franchise Operation Manual?

Written by Sparkleminds

Are you a business owner, who wants to know what is a Franchise Operations Manual in Franchising your business? A Franchise Operations Manual is the DNA of a franchise system. Franchise Operations Manual is the foundation that governs franchise unit performance, procedures, and conduct.  It provides detail like the specifications, standards, and procedures with which franchisees must comply to operate the franchised businesses and consistently deliver on the franchisor’s brand promise. Let’s dive in to know what is a Franchise Operations Manual?

What is a Franchise Operation Manual?
What is a Franchise Operation Manual?

Nonetheless, franchise operations manuals are essential to franchisors because they ensure uniformity of customer experience and quality control across locations, act as a training tool for new franchisees, and serve as evidence that the franchisee is an independent contractor in the face of a claim against the franchisor that it is liable for franchisees’ errors.

They are an invaluable resource for franchisees because they serve as the franchisee’s daily reference tool. This gives the franchisee all the requisite knowledge to run the franchised business while simultaneously reducing the influx of emergent questions that the franchisor needs to answer.

What are the contents of the Franchise Operations Manual?

Confidentiality of the Operations Manual

This document contains confidential information and must remain private.  The introduction outlines what role the manual will play in the franchise system and how it needs to be used.  Furthermore, it updates any legal disclaimers worth mentioning.

Details about the Franchise

The manual is a guide to telling the franchisee about the brand.  It also helps to tell the new owners of the business.  The franchisees can use this manual to replicate the brand’s quality and standards. 

Using this, franchisees and their employees can follow the parent company’s policies and procedures, especially with customer service.  It gives details of the founders, management team, and protocols, followed by details of the Target Audience, services, and products offered.

Operations of the business

It communicates how the business operates.  The franchisor trains the franchisee on what the company does and the procedures to do it.  It describes the products or services offered in the business in the form of description and explanation.  Some of the information in the section include:

  • Services and products offered and how to provide it
  • Process of developing the products
  • Prices and pricing formula
  • Exclusive suppliers
  • Customer service and support
  • HRM
  • Accounting

Marketing and Development

The objective of this part of the manual is to inform the franchisee about their role in marketing their products and services within their region.  It educates the franchisee on how to promote and manage the business effectively.  It teaches them how to make use of tools provided to them to increase sales.  This section includes –

  • Marketing strategies based on case studies
  • Use of the company website
  • Social media and email marketing

Suppliers, Raw Materials, Procurement, and Signage

This section is to instruct the franchisees on the exclusive supply chain, and approved raw materials.  It shows the franchisees how to procure these raw materials from approved suppliers.  It’s got details of recipes, restrictions, and signage.  In some parts of this section you might find:

  • List of suppliers
  • Insurance for the maintenance
  • Approved raw materials and services
  • Construction and design layout
  • Using the management systems
  • Process of requesting the approval of other suppliers
  • Templates for answering emails and phone calls

To Conclude

The franchise operations manual varies from brand and industry.  But most of the operations have the same SOPs.  To find out more about how to franchise your business and get these processes in place, you can get in touch with our experts.

sparkle★minds, has over two decades of franchising and consulting experience, having catered to over 500+ clients to successfully convert their business into a franchise model.  Get in touch with us today!

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How to turn your business into a franchise?

Written by Sparkleminds

Ever felt like your business has so much potential but lack the necessary knowledge to take it to the next level well franchising your business might be the perfect solution for you. Franchising your small scale business is a great way to procure the desired business growth while minimizing other costs and tensions that comes with the expansion process. By franchising a small business, you are essentially leasing your business model, brand, and standardized operating strategies to another entrepreneur. Franchisees receive a proven business model and ongoing support in return for franchise fees and royalties. Despite the challenges of franchising, it can also be rewarding financially and professionally.

How to turn your business into a franchise?

Is Franchising The Right Move For Your Business

Franchising help you to explore new markets with the help of partners who have excellent knowledge about the local markets and ideas required to make it a success. This partnership help you to grow your business while sharing the financial liability with the franchisees, which arguably reduces the franchisor’s risk. But how do one know if his business eligible for being franchised?

Here are a few things to be analyzed to determine whether your business is fit for franchise.

Good ROI. Establish the profitability of your business and demonstrate that someone investing time and resources can expect a similar return.

Simple operations. Is it possible for someone else to follow your playbook and succeed? Start by streamlining your operations without compromising quality or ROI, if the answer is “maybe.”.

Support. Could you support someone else’s franchise needs as they establish their own business? Now you will be supporting someone else and setting him or her up for success instead of running a business. Put together a team that can make this happen.

On analysis of the above factors if your are confident that you can provide these services to your franchisee then you can move forward towards franchising your business. 

Once you have made up your mind about franchising following these steps might further simplify the expansion process.

1. Make a detailed study about the market you are expanding to. Make the 1st phase marketing plans that needs to deployed at the same time the franchise is being set up to attract customers. Develop a growth plan and think strategic ways to increase growth.

2. Put your business operations into a step-by-step plan that you can easily follow. From the time you purchase the opportunity through the financially successful completion of the first year or two of franchise operations, you should cover as many operational aspects as possible.

3. Consult a franchise lawyer or a professional familiar with franchising of business entities before drafting your franchise contracts, leases, and royalty agreements.

4. Make sure your franchisees are guided by a service and support team. Franchisee concerns can be addressed by your service and support team, and quality control can be ensured by them. Maintain high internal quality standards and establish service standards.

Ensure That Both Parties Enjoy The Benefits Of Franchising

One of most iconic features of franchise business is that both the parties share the equal amount of risk and benefits. This shared model of the franchise business provides benefits for both the franchisor and franchisee alike. 

Both parties benefit from the joint venture, as the franchisor receives capital to expand the business and the franchisee receives knowledge from the franchise company to ensure success. As a franchisee, this means having a trusted partner who has done all the work to deliver a package that you can build upon with your own hard work and contributions.

When searching for a franchisee, look for someone who is financially stable and has proven business acumen, as well as someone who will follow the system you establish. There is more to finding the right franchisee than just that. Franchise BAZAR helps you to connect with prospective franchisees for your business.

Establish a well-defined company culture if you haven’t already. Once you have established a culture search for people who have the ability to mimic what you have put in place. The people you are going to tie your hands with should have a clear love and passion for the industry you are in. If you are unable to find the right guy or make a mistake while evaluating a person, none of the above-mentioned factors matter. 

The franchise sector in India is one of the largest in the world, the sector has estimated valuation of about 200 million dollars as of today. Apart from this India has one of the world’s largest younger population in the world the young population raises the demand for more services that can meet their demand this in turn opens up the franchise market for more players.

Over 500+ clients  have achieved great  business results with sparkle★minds , so what are you waiting for? Get in touch with us now!

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How to end a franchise agreement Gracefully at Contract Renewal?

Written by Sparkleminds

Generally speaking, franchisors and franchisees have positive relationships. However, in rare cases when the relationship between a franchisor and franchisee does not feel right, terminating the Franchise agreement at renewal time may be the most beneficial move.

How to end a franchise agreement Gracefully at Contract Renewal?
How to end a franchise agreement Gracefully at Contract Renewal?

This Blog will explain how to end a franchise agreement, some common reasons why franchise contracts don’t renew, and some top franchisor tips for ending a franchise agreement gracefully. 

Reasons to avoid franchise agreement renewal 

Franchising involves a lot of decision-making and responsibility, and it isn’t always easy. The key to a successful franchise operation is finding fantastic franchisees who will support your vision and make your life easier. Two ways exist for you to end a business relationship with a franchisee if you feel you’ve found the wrong franchisee:

Termination of the franchise agreement – The agreement is canceled before the end of a franchisee’s contract term.

Non-renewal of the franchise agreement – The agreement is not renewed at the end of a franchisee’s contract term.

To make the best decision, you’ll need to have a thorough understanding of the different franchise renewal rights available to you. A franchisor can terminate or refuse to renew a franchise agreement if a franchisee has committed a “repudiatory breach”.

When a contract is breached by a repudiatory breach, the non-defaulting party is entitled to terminate the contract and is thereby released from its terms. As there are risks if you get it wrong, it’s important that you are certain of your position. —Eldwick Law

Examples of contract breaches that would fit this bill include:

  • Failure to obtain the correct licenses
  • Being involved in illegal activities
  • Failure to pay franchise fees or royalties 
  • Bankruptcy
  • Neglecting to follow franchisor guidelines, such as operations instructions and branding and marketing guidelines

How to end a franchise agreement 

You can terminate a franchise agreement by:

1. Ensuring you have the right to do so

Depending on what kind of breach you are dealing with, this step will differ. The law of contracts gives different weight to different clauses, and some situations will be more clear-cut than others. Whatever you’re dealing with, be certain that you have the legal right to terminate or reject renewal before you reach out to the franchisee and get the ball rolling.

2. Notifying the franchisee

The following information should be included in your breach notice to your franchisee:

  • How the franchise agreement terms have been violated (or breached), and the nature of the breach (or breaches)
  • A timeline for making reparations, as well as information about how the breach can be repaired (if this is possible)
  • There must be a clear statement that if the breach is not resolved, the franchise agreement will be terminated

It will no longer be possible to terminate the franchise agreement if a franchisee resolves the breach or breaches you’ve mentioned in this notice.

3. Tying up loose ends

The franchisee must pay any outstanding fees when leaving the franchise, and must return all paperwork and documentation regarding the franchise. At this point, a franchisee may also be required to sign an agreement promising not to start a competing business within a certain period.

There are four tips franchisors can use to end the franchise agreement in a conflict-free manner

  •  Always seek legal advice early

Get legal advice as soon as possible if you are uncertain whether you have a case for termination. Regardless of how simple or clear things seem, seek legal advice immediately. Do not contact your franchisee with a breach notice until you are absolutely certain you are in the right. Franchisees who wrongfully terminate agreements are likely to make legal claims against you, causing financial and reputational damage to your entire company.

You will be able to determine your next steps with the help of legal advice. The contract can be terminated immediately if a serious breach has been committed. The franchisee might also be suspended pending further investigation if your legal advisor advises you to do so.

  •  Turn to forced termination as the last possible option

Before terminating your franchise, communicate with your franchisee and offer ways to resolve the issue. Try to reach an agreement with your franchisee about the terms of their exit once you’ve decided definitively that you will be terminating the agreement through a forced termination. If you can do this, you’ll both come out of the relationship better off.

A new franchisee might be interested in buying the franchise location, for example. Therefore, the franchisor will lose less income and the franchisee will likely get back at least some of their investment. 

  •  Show your willingness to compromise 

Consider your situation carefully if you must choose between losing a one-time sum of money and ending your relationship with your franchisee without conflict. Despite the monetary loss initially appearing to be more problematic, it could solidify the good reputation of your franchise. 

You’re much less likely to lose a franchisee if you show your willingness to compromise during negotiations and be mindful of their needs.

  •  End things on a good note

You should also do your best to end negotiations on a positive note. It is still highly recommended that you behave politely and professionally in the final stages of the franchise agreement, even if both parties have experienced difficulties during the process. This will reduce the chances that a franchisee will attempt to take legal action against you (whether this legal action is valid or not).

Effective franchisors prioritize their franchisees

The franchisor’s role includes prioritizing franchisee satisfaction as one of its most important responsibilities. Franchisees who are happy are hard-working and do their best to help your business succeed. 

Sparkleminds can help you franchise your business both nationally and internationally. It has helped more than 500 businesses in franchising their businesses. So, what are you waiting for? Connect with us today!

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