A franchise that’s changed the way we eat fried chicken
KFC is a brand that’s reached nearly every corner of the world and has been around for more than five decades. Founded by Colonel Sanders, KFC is a leading fast-food franchise that’s estimated to have sold nearly 20 billion pieces of fried chicken!
KFC is a brand that led with a focus on fried chicken at a time when there was an abundance of hamburgers. While looking for suitable restaurants to franchise his recipe, Sanders and his wife Claudia closed down their old restaurant and opened a new one in Shelbyville in 1959. He visited other restaurants quite often to franchise his recipe. But after some time, the franchises started to visit him instead.
In this blog, we’ll discuss the KFC franchise model, some of its franchise agreement forms, and the marketing strategies it’s used over the years.
The KFC Franchise and the KFC Business Model
In a franchise system, everything is documented. Which was one of the main factors that allowed KFC to succeed. By having strict standards and procedures set in place they’ve been able to set up a proven system for success. For example, some of its operating procedures are,
The chicken has to be cooked in a pressure cooker and left for 15 minutes
The size of each chicken part must be at least 8 cm wide and weigh 300 grams
The chicken must be marinated overnight
The age of the chicken has to be between 60-70 days
Systems like these provide structure and can streamline operations, which in turn helps your business run more efficiently.
The franchise business model was a huge success for KFC. They were the first brand to expand its franchised restaurants internationally. And opened their first outlets in Canada, and then later, in the UK, Mexico, and Jamaica by the mid-1960s.
KFC in India
When KFC entered India in 1998, it was met with protests from farmers, environmentalists, customers, and doctors. So KFC began to investigate the issue more closely. Its findings revealed that the brand was heavily perceived as a restaurant that only served chicken. Which went against most Indians’ eating preferences at the time. Furthermore, the brand was also thought to be expensive. Some other drawbacks were the brand’s positioning. According to analysts, the brand marketing itself as a family restaurant did not come out clearly in its communications.
So the brand decided to revamp its menu. Instead of coleslaw it added fresh salads and introduced a new Zinger Burger to its menus. The brand also included more vegetarian options to cater to the Indian customer base. And along the way, it also changed its approach. By catering to families who not only seek food but also recreation. They introduced a ‘Kids Fun Corner’ recreational area for children inside their restaurants.
KFC Franchise Agreement
The KFC Master Franchise Agreement Form
As a franchise, KFC encourages its franchisees to set up master franchises in locations and territories approved by the company.
KFC Franchise Disclosure Document
The KFC FDD document outlines that all KFC outlets will either operate as dine-in or carry-out outlets and have menus that are approved by the KFC brand.
The KFC Marketing Strategy – Growth Factors and Success
KFC realized that time means money. And serving their customers quickly would encourage their customers to visit their establishments again. This quick service strategy is one of the main reasons for KFC’s high customer retention. And the founder realized the importance of adopting new technology for the company’s success. Like using the pressure cooker – to prepare their chicken, weeks after its introduction.
In February 2011, KFC announced that it would be replacing its “Finger-Lickin’ Good” slogan with ‘So Good’. Rather than just being a tagline, the company stated that it wanted to move forward with the new slogan to refer to the brand as a whole, not just its fried chicken. An understandable move, but also a shame to lose something so unique to the brand after all these years.
Looking Forward – What to Expect
KFC is not a brand that has based its growth on laurels. From the beginning, they’ve adopted new technology and pioneered practices that have kept them ahead of the game. The brand has embraced new technology like QR codes, voice-activated devices, and social media platforms that help their staff further improve their workforce skills.
Recently KFC announced that they would be introducing more vegan alternatives to their menus and have been trialing plant-based chicken in cities like Atlanta, Georgia. Through working with companies like Beyond Meat – a plant-based protein company, they offer customers free samples and note their feedback.
Conclusion
From its humble beginnings, KFC has grown into the world’s most valuable fast-food brand & the success story of its founder and the face of the brand – Colonel Sanders, has served as an inspiration for many business owners and entrepreneurs over the years.
If you’re interested in franchising your business visit sparkle★minds and sign up today.
– How this tiny fast-food restaurant from Georgia grew to be the third-largest fast-food chain in the world.
Chick-Fil-A has gained a cult following over the years for its amazing chicken sandwiches. Both the brand and franchise have fine-tuned their approach to both fast food and customer service. From closing their stores on Sundays to dominating the top earning spot in 27 out of 50 states in the US.
In this blog, we’ll explore Chick-Fil-A’s history, its franchise models, the business strategies it employs, and some of its marketing campaigns.
A Little History about Chick-Fil-A and Its Founder
Chick-Fil-A was founded by Truett Cathy. His early years were spent helping his mom cook and clean for those that boarded their home. And Truett was said to have gained his entrepreneurial spirit from selling bottles of Coca-Cola out of a wagon. Later, Truett and his brother Ben opened The Dwarf Grill in Hapeville, Georgia, in 1946.
After Truett developed a method to make fried chicken in a pressure cooker for the same amount of time it would take to make a hamburger. And their first restaurant success, Chick-Fil-A Inc. was trademarked in 1961.
The diner’s success gave Truett the push he needed to expand the business further & in 1967, Truett opened the first Chick-Fil-A restaurant in Atlanta’s Greenbriar Mall, pioneering the concept of in-mall restaurants.
Throughout his life, Truett invested his time in more than just business and believed that he was in the business of people, not chicken. While he never attended college, he believed that higher education was important and used Chick-Fil-A as a platform to give over $35 million in college scholarships to Chick-fil-A Team Members.
Now, Chick-Fil-A has over 2,250 Restaurants in 47 states. And some of the more unique restaurants opened by Truett over the years were Truett’s Grill, Truett’s Chick-fil-A, Truett’s Pizza Café, and Truett’s Luau.
Chick-Fil-A Franchise
Chick-Fil-A’s corporate culture is based heavily on conservative religious values. Which may be seen as one of Chick-Fil-A’s best assets by some or more as a point of contention by others. A lot of people these days tend to gravitate towards more open and acceptable company cultures. Which is something to keep in mind if you’re starting a business or franchise.
That being said, corporate culture and values are important to look into before starting or investing in any franchise. Because if the company’s values conflict with yours it may cause problems in the future. So if religious conservatism isn’t your cup of tea, don’t get discouraged. There are other options out there.
Chick-Fil-A Franchise Models
The Aggressive Franchise Model (1980 – 2013)
Chick-Fil-A’s earliest franchise models focused heavily on expanding into new locations and opening suburban mall food courts. This practice held on from the 1970s to the 1980s. From the start, Truett was intent on being open 6 days a week for 24 hours, except on Christmas and Thanksgiving. This policy was more attributed to Truett’s Southern Baptist views.
Although, he was noted to have said that he was simply too tired to work on a Sunday after working every day of the week. And he wouldn’t expect his workers to do what he couldn’t either.
Primary Model (2013 – Today)
Now, Chick-Fil-A restaurants are located in independent and non-stand-alone locations like malls, and online units. Or even in satellite units where the brand has direct access to the site owners or managers.
The franchisees are required to focus solely on the Chick-Fil-A franchise, so if you’re a serial entrepreneur or business owner this may not be right for you. One possible reason for this could be, is that the company doesn’t want to focus on creating conglomerates. They prefer quality over quantity for their franchises. Because each Chick-Fil-A restaurant is independently owned and operated, serving the community it resides in.
And as everyone knows – the stores are famously closed on Sundays.
Why Does It Cost Only $10k To Own A Chick-Fil-A Franchise?
In America, it costs upwards of $2 million to develop and open a franchise, especially for big brands like KFC or McDonald’s. And corporations won’t even look at your applications unless you have a net worth of at least $1 million. But at Chick-Fil-A, things are done a little differently.
1. It has no minimum net worth requirement
2. It has the lowest franchise fee, for a fast-food restaurant chain ($10k)
3. It has the lowest total investment cost for a franchisee ($10k)
4. It charges the highest royalty (15%)
The reason? It’s because Chick-Fil-A (the franchisor) covers almost all the costs for opening a new restaurant (which could range from $343k to $2m). The franchisee only needs to pay the $10k fee. And Chick-Fil-A pays for and retains ownership of everything – real estate, equipment, inventory, etc.
So while a franchise like KFC takes 5% of sales, Chick-Fil-A takes 15%, and 50% of any profit.
Chick-Fil-A’s Marketing Strategy and Growth
Chick-Fil-A’s main marketing strategy starts with its franchisees. John Hamburger, the founder of industry trade publication – Franchise Times Corp., stated that the franchise aims, “To put somebody in the store close to the customer”. Adding that, “They’re dealing with the customer, and they’re in the community. They’re active in the community. And that’s what Chick-fil-A does.” The company also encourages its franchisees to get involved with their communities through various local organizations.
Even today Chick-Fil-A only opens 100 stores a year.
The Brand’s Slogan and Name
When first opening its stores back in 1967, Truett was looking for a name that reflected the company’s top-quality chicken sandwiches every time customers visited their restaurant. And the trademark attorney he sought out also encouraged him to choose a unique-sounding name.
He finally chose Chick-Fil-A – ‘Chick’ to represent the restaurant’s signature item and ‘fil-A’ as a play on the word filet and he replaced the ‘et‘ with an A to refer to the Grade A quality of the chicken.
And lastly, Chick-Fil-A’s famous slogan, “We didn’t invent the chicken, just the chicken sandwich” was trademarked in 1961. Later in 1995, the brand also introduced its “Eat Mor Chikin” cows campaign. This slogan in particular has stuck with the brand for nearly 20 years. And they’ve continued to promote their bovine mascot through cow-themed mugs, T-shirts, stuffed animals, refrigerator magnets, and laptop cases all on their company website.
Consumer-Focused Strategy
For nearly 8 years in a row, Chick-Fil-A has maintained its position as America’s favorite restaurant, according to the American Customer Satisfaction Index (ACSI). Even Though fast food has declined in popularity, Chick-Fil-A has managed to maintain its ACSI score of 83, the highest score on the restaurant survey.
The brand specifically trains its employees to go the extra mile when it comes to customer interactions. This ties in with its ‘customer-first’ mantra and the chain’s founders have held onto the philosophy that the most sustainable way to do business is to provide the best possible experience for customers.
The Future – What Can We Look Forward To?
Recently Chick-Fil-A has led the trend in its corporate response to the coronavirus. The company closed its stores on March 15, 2020, during the pandemic. It provided sick leaves for its employees with confirmed COVID-19 cases. Causing several other fast-food chains to follow suit.
As of 2022, Chick-Fil-A earned the No. 1 spot as America’s most-loved fast-food chain. Its impressive customer service played a huge role in its success. According to BuzzFeed, Chick-Fil-A is expected to become the world’s third-largest fast-food chain, surpassing Wendy’s, Taco Bell, and Burger King.
Conclusion
As stated Chick-Fil-A is a brand that heavily focuses on customer service and interaction to drive sales. And it is also a brand that centers itself on building connections with communities and local organizations in the locations it chooses to set up its stores.
If you want to build a successful franchise model like Chick-Fil-A in India, visit sparkle★minds and talk to our experts now!
A tell-all about how the founder – Fred DeLuca, grew the brand from its humble beginnings to the world’s largest fast-food chain.
Since its humble beginnings in Bridgeport, Connecticut, Subway has achieved worldwide success. The brand has over 21,000 franchises operating across 100 countries. More outlets than its competitor McDonald’s. And is about as ubiquitous as McDonald’s and KFC.
So, how is Subway so successful?
Let’s take a deeper look into the brand’s story.
Starting From Scratch – Subway’s History
Subway has an inspiring origin story. Fred DeLuca – the founder, originally did not want to become a businessman but a medical doctor. To raise funds for his college tuition he decided to open up a restaurant. With an initial investment of $1000 from Dr. Peter Buck – a family friend, 17-year-old Fred DeLuca opened Pete’s Super Submarines in 1965. The restaurant served freshly-made, customizable, and affordable sandwiches to its customers.
On the first day, the shop sold 312 sandwiches, each of them costing less than $1. The long oblong-shaped bread was a novelty of the shop they’d hoped would be popular among the local customers.
And they formed a Doctor’s Association to oversee the running of their shops too – a tongue-in-cheek reference to Fred’s medical aspirations and Dr. Buck’s doctorate.
The Subway Franchise
The two had an initial goal of opening 32 restaurants in 10 years. But for a fast-growing company, this wasn’t a reasonable goal at the time. By 1974, Fred and Dr. Buck owned and operated 16 submarine sandwich shops in Connecticut. This led the two of them to turn their restaurant into a franchise. Because they knew it would be the only way to get them the rapid growth they wanted.
Fred and Dr. Buck weren’t experts in their fields when it came to expanding their business. But this didn’t stop them from expanding their knowledge and learning how to make their restaurant a success.
The Brand’s Growth
When the company first started franchising in 1974, it had a modest goal of expanding its reach. Eight years later, in the mid-1980s, the company grew from having 16 stores to 200 & from there it quickly expanded to 1,000 stores in 1987 and reached 10,000 in 1995. In 2002, they finally managed to pass McDonald’s store count in the US. And in 2010 they’d surpassed McDonald’s global store count.
At the time McDonald’s had nearly 8,000 franchised stores. And Fred DeLuca, the founder, set a modest goal of reaching 5,000 stores by 1984. By 1995, they had 10,000 stores, not 8,000.
Subway in India
In India, Subway set up its first stores in New Delhi in 200 & today it’s got over 590 franchised stores across 70 Indian cities. Subway’s unique systems and easy-to-follow structures have allowed entrepreneurs of various backgrounds access to the brand.
And over the years Subway has adapted to the numerous regulatory changes and consumer expectations of the Indian market. Making it a great choice among business owners and entrepreneurs.
Subway’s Business Model
“I tell everybody there are only three things that we do. We build sales at the store level, we build profits at the store level, and we build more stores. The first two things go in tandem, of course. It’s pretty tough to build profits without sales.” – Fred DeLuca for Inc. Magazine.
Subway’s Ethos
The company’s slogan – Eat Fresh, calls attention to how all its bread is freshly baked and its sandwiches are made with fresh ingredients. And Subway has been making its signature bread from scratch since the 1980s.
Primary Model
Subway is one of the cheapest brands to the franchise. The company’s business model primarily revolves around franchises and non-traditional units. They operate with a focus on keeping costs down and profits up. And most of its growth comes from its franchise-only model.
The company recognized that a franchise-only model would motivate entrepreneurs to do their best since the store’s success meant their success. Especially when their livelihoods depended on it.
As a result, the company continues to use a 100% franchise model to this day.
Non-Traditional Units
Through the use of proprietary models, the company has been able to explore different strategies and potential growth opportunities in the country. This allowed them to plan store openings in places where they can have a large number of franchised restaurants.
One good example of this would be a franchisee who set up a subway inside a convenience store. An unconventional step that introduced a low cost of entry for the brand and benefited from other convenience stores in the area.
Furthermore, non-traditional outlets (think airports, transportation hubs, and supermarkets) allowed them to access more customers. People who previously, didn’t consider Subway as an option. This helps in increasing brand awareness. By breaking out of the norm and finding new opportunities.
Subway Agreement Forms
Let’s take a brief look into some of the paperwork surrounding the Subway franchise.
Subway Franchise Disclosure Document
What Is A Franchise Disclosure Document?
A franchise Disclosure Document or FDD for short is a legal document that’s drafted by a lawyer and provided by the franchisor to the franchisee. The FDD generally includes 23 sections that detail terms like fees, the franchisor-franchisee legal relationship, and the company’s background.
What Is In The Subway Franchise Disclosure Document?
If you were wondering what a Subway FDD looks like, here’s a brief outline of its table of contents.
Table of Contents
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES
BUSINESS EXPERIENCE
LITIGATION
BANKRUPTCY
INITIAL FEES
OTHER FEES
ESTIMATED INITIAL INVESTMENT
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
FRANCHISEE’S OBLIGATIONS
FINANCING
FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING.
TERRITORY
TRADEMARKS
PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION
OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION
PUBLIC FIGURES
FINANCIAL PERFORMANCE REPRESENTATIONS
OUTLETS AND FRANCHISE INFORMATION
FINANCIAL STATEMENTS
CONTRACTS
RECEIPTS
Subway Operations Manual
One of Subway’s big secrets to success lies in its operations manual. And the simplicity of Subway’s operation manual is what makes it ingenious.
What Is An Operations Manual?
It’s the document that allows Subway to run like the well-oiled machine that it is. It includes instructions on day-to-day operations, rules, and regulations for the franchisee and training materials, as its main talking points.
Let’s take a look at the Subway Training Manual,
Table of Contents
INTRODUCTION
CHAPTER 1: THE TRAINING PROCESS
TRAINING: DAY 1
TRAINING: DAY 2
TRAINING: DAY 3
TRAINING: DAY 4
TRAINING: DAY 5
CHAPTER 2: RULES AND REGULATIONS
HANDWASHING
DRESS CODE
PUNCTUALITY
WRITE-UPS
SUB-WAY
CLEANING
CUSTOMER SERVICE
RESPECTING YOUR FELLOW EMPLOYEES
CASH.
SCHEDULE
CHAPTER 3: MENU ITEMS
VEGETABLES
MEATS
OTHER
CONCLUSION
INDEX
By having only three main sections in its training manual, Subway has been able to refine and simplify its training process while streamlining its customer service.
Branding
The Subway Logo
Unlike a lot of brands that revamp their logos with the times, the Subway logo has remained the same since its introduction. The arrows present on the logo refer to the entry and exit of the Subway store. Altogether the brand has managed to create and sustain a logo that’s remained consistent and relevant since its introduction.
New Menu Options
The 6-inch, lunchtime classic was initially called the Snak when it was added to the massive menu in 1977. Aside from sandwiches and foot-longs the menu also offers salads, wraps as well as donuts, muffins, and cookies. And of course, Subway’s signature model – The create your own sub sandwich.
In some countries, the brand has also included flatbreads, English muffins, and breakfast sandwiches in their menus to cater to local customers.
Recently, the company has shifted its focus from the customizable assembly line model to sizing down its menu and offering sandwiches with a broad appeal. So it required minimal decision-making on the customer’s part. This change was made to streamline the production process and improve customer satisfaction. This has been reported to be the brand’s most significant menu update in the last 60 years.
Subway’s Marketing Campaigns
In 2000, Subway introduced Jared Fogle during one of its marketing campaigns. He used to weigh 425 pounds and lost 200 of those pounds when he was on a diet of subway sandwiches. Fogle was often seen in a lot of ads holding up an old pair of his pants to show how much weight he had lost on his Subway-only diet.
This did wonder for the brand’s name, which at the time was promoting itself as a healthier alternative to fast food restaurants. This was in part due to diet fads and changing eating trends of the early 90s and 2000s. Subway released an ad that involved seven low-fat sandwiches and compared them to other fast food options like burgers and tacos. By tapping into customer preferences and the current trends of that time, Subway was able to leverage its success. Making them the largest restaurant chain and even surpassing McDonald’s in 2002 and 2010.
Adapting To Covid-19
With social distancing and stay-at-home regulations in place, a lot of restaurants and on-site businesses were struggling to stay afloat. However, Subway saw an opportunity. They introduced services like allowing customers to purchase ingredients (like fresh produce or packaged meats) and offering curbside pickups or contactless delivery options.
And in honor of National Nurses Week, they donated 6-inch subs to healthcare workers with every Subway order on the post mates app. Subway has launched many programs during the pandemic to help uplift communities. By partnering with Feeding America they donated a free meal with every foot-long purchase. And they also donated food across the US, UK, Ireland, Latin America, and New Zealand.
The Future – Some Brand Updates and Campaigns
Following the death of their previous CEOs, Subway welcomed a new CEO – John Chidsey. Who kickstarted the brand’s transformation journey. Subway launched a new healthy eating program to promote its low-fat sandwiches as a part of its Eat Fresh Refresh campaign. As a call-back to its Refresh tagline, the company has also had a complete relaunch of its menu coupled with a revamped mobile app.
The Subway Series Campaign also did wonders for the brand’s sales. Trevor Haynes, president of Subway North America stated, “The results from the Subway Series launch and the positive reaction from guests and franchisees demonstrates that our transformation strategy is working,” on the launch earlier this year.
And as of 2022, Subway has launched a Subway cares foundation as an independent, non-profit, global organization. To support today’s youth through hunger relief, tuition assistance, mentoring, and leadership programs.
In the future, the company will continue to embrace the digital age, pursue sustainability, and handle any curve balls thrown its way.
Conclusion
Subway is a brand and franchise that’s had its ups and downs like any successful organization. Through consistent efforts to adapt to changing trends, and proper planning, they’ve managed to come out on top every time.
You can be the next franchise successful brand like Subway, connect with sparkle★minds to know more about franchising your business.
McDonald’s is a brand and franchise that’s reached worldwide popularity. Today, the brand is synonymous with burgers, fries, and shakes. Coupled with its iconic logo, anyone can recognize the brand no matter where they are.
Let’s talk about the MC Donald’s franchise success of the brand
In this blog, we’ll discuss the brand’s history, the founder of the brand, some of the business models McDonald’s has used for its franchisees, and its marketing strategies.
A Brief Introduction to the Brand and Franchise
The McDonald’s corporation is a North American fast-food organization. Its best known for its burgers, cheeseburgers, and fries, but the menu also includes other popular items like its Happy Meal, that’s a hit with its younger customers, the Big Mac, the McFlurry, or even its separate breakfast menu.
And in light of changing preferences, McDonald’s has recently introduced fruit and vegetable choices in its meal packages. By bringing in healthier options the brand hopes to inspire healthy-eating choices in its younger customers.
A History of McDonald’s
McDonald’s was first established in 1940 by brothers Richard and Maurice McDonald in California, United States. Originally a drive-in, the brothers decided to revamp the business in 1948. The new model was designed to produce huge amounts of food at low prices. To achieve this, the brothers limited the menu, only offering a select few items, and developed a high-Speed Service System.
This system allowed them to introduce a self-service counter and eliminate the need for staff. The burgers were made ahead of time and placed under heating lamps which allowed them to charge 15 cents a burger – almost half the price of competing restaurants at the time.
Ray Kroc
Ray Kroc, the former CEO of McDonald’s was originally a salesman who supplied appliances for the restaurant. In 1954, he visited the shop to see how one small store can sell so many milkshakes and realized the potential the brand held.
Kroc became a franchising agent for the brand and launched McDonald’s System Inc., which later came to be known as McDonald’s Corporations. In 1955, he opened the first franchise east of the Mississippi River in Des Plaines, Illinois. And in 1961, he bought out the McDonald’s brothers for $2.7 million.
The Brand’s Mission and Ethos
McDonald’s mission of “Quality, Service, Cleanliness, and Value”, is what has kept the brand in the business. The McDonald’s franchises focus heavily on five fundamentals – people, products, place, price, and promotion. Along with their business strategy “Plan to Win”.
And the McDonald’s business model depends heavily on three core principles – retaining, regaining, and converting. It focuses on retaining old customers, regaining lost trust, and converting casual customers into regular/loyal ones. Additionally, it’s embraced digital advancements and food delivery. The company has always been open to reshaping its customer experience through innovation and human endeavors.
The McDonald’s Franchise System
Kroc soon realized that franchisees were integral to the success of the brand and launched a franchise system. As he once stated, “McDonald’s can’t be successful unless our franchisees are successful.”
He prepared exact standards of how each McDonald’s was supposed to be run from cleaning to food preparation. And to ensure consistency, he created Hamburger University in 1961, to train franchisees.
He eventually changed the format of the restaurants by adding counter staff to take customer orders and also added a drive-through. An addition that’s become prevalent in almost all fast-food franchises today.
What Does Owning a McDonald’s Franchise Look Like?
McDonald’s opened its first international outlet in 1967 in Richmond, British Columbia, Canada. And by the early 21st century the brand had over 34,000 outlets across 115 countries worldwide. Growth was so quick that it became the most popular family restaurant, with its affordable food, separate menu options catered towards children, and flavors that appealed to nearly everyone.
With over 60 years in the business, as a franchise, McDonald’s has a proven framework for success. It’s a classic example of a heavily franchised brand. As of 2021, over 56% of its revenue came from franchised restaurants. While the company owns and operates (COCO model) a small percentage of its restaurants, McDonald’s plans to reduce that number to 5%, with a long-term goal to transition towards 95% of its outlets being franchised (FOFO model) restaurants.
In 2021 the company generated over $23 billion in revenues, of which $9.78 billion was from company-owned restaurants and $13 billion from franchised restaurants. And the success of their overseas franchise models has resulted in the term, “McDonaldization”
Developing McDonald’s Marketing Plan
In less than ten years, after Kroc became the sole owner of the franchise, the number of outlets exceeded 1,000. Through its success, the company began trading publicly in 1965.
The first ever McDonald’s mascot was a burger wearing a cooking cap who was alluded to as Speedee. In 1962 the golden arches were introduced and have continued to be the face of the brand, even today. The logo was inspired by the tall yellow arches that dominated earlier McDonald’s rooftops.
And lastly, in 1965, their newest mascot, Ronald McDonald was introduced. However, the growing negative perception of clowns in the 21st century resulted in them sidelining the character.
The most notable addition to the brand was the introduction of the Big Mac to the menu. The iconic hamburger was an instant hit and the company’s top-selling product, after its French fries. These changes helped the brand grow and gain popularity among the masses.
Criticisms Leveled at the Brand
The success of McDonald’s also brought its fair share of criticism of the brand. A lot of this was concerned with the brand’s association with the global increase in obesity. In the early 2000s, various lawsuits and complaints were filed and registered against the company in the United States, alleging that its food caused health problems. The company also received a lot of negative press from the documentary Super-Size Me (2004), in which the filmmaker documented a decline in his health while on a diet of only McDonald’s foods.
In response, the brand started developing vegan options for its menus, like McVegan, P.L.T., and McPlant. And in 2017 the company released its first plant-based burger. In 2018, the company announced that it had stopped using preservatives in most of its burgers and eliminated its super-sized menu options. And its US and Canadian branches stopped using Trans fats in a number of its food items. However, this did little to curb the health concerns regarding the brand.
Additionally, the company also faced a spike in the number of calls to increase employee wages. The term “McJob” was added to Merriam-Webster to mean a low-paying job. Recently, the company has come under fire, similar to other large corporations for its negative impact on the environment, especially concerning greenhouse gas emissions.
In answer to this, the company increased employee wages and launched initiatives to cut down on its carbon footprint. Like launching programs to move towards using recyclable bags, utensils, and other items. And making moves to be increasingly transparent in their production processes.
The Future of McDonald’s
As of 2022, McDonald’s is still a leading franchised brand in the fast food industry. Frankly, there’s little doubt about the company’s ability to attract customers. Even during a bad year, McDonald’s still makes a profit.
As for the future expansion of the brand, McDonald’s has already been taking steps to improve upon its already successful business model. This can be evidenced by the introduction of automated ordering stations in their outlets, digital or contactless payment options, and more plant-based food items in their menu to cater to a more diverse customer base.
They also plan on remodeling their restaurants to cut down on carbon emissions by either replacing their equipment or altering their practices. McDonald’s plans to fully achieve company-wide, net zero emissions by 2030.
In Conclusion
McDonald’s is a great business model for startups or experienced entrepreneurs to read up on if you’re currently looking up references to start your franchise. It’s got a proven working model and over 60 years’ worth of experience in the industry to back it up. All of which can be evidenced by the franchise’s worldwide success.
So what are you waiting for? Take action now! Your business can be the next global franchise successful brand. Start franchising today with sparkle★minds. Connect with us now!
American brands have always had a huge presence in the Indian market. This includes American franchises and 40% of all American businesses are franchises. In India, the franchising business is growing at 30% – 40% annually and is the second-largest franchise market in the world after the US.
In this article, we have found out why American brands are more successful in franchising, and how international brand franchises differ from Indian franchises. Stay tuned to know more!
What Is A Franchise? How Does It Work?
In a franchise system, someone else owns the brand. Meaning the franchisee or investor, pays an initial cost to the company to open a branch of their business in a specified area or location.
The franchisee is in charge of managing and running the business under the company’s license. And franchisees get to keep the bulk of the profits they earn through those sales after paying a small percentage to the parent company through royalties.
And the parent company provides any initial or ongoing support to the franchisee for the duration of their contract.
Licensing and Franchising In International Businesses
In international businesses, franchises and licenses are agreements where certain facets of the brand are exchanged for a fee. Franchise agreements are about the business’ entire brand and operations, whereas licensing agreements to apply to registered trademarks.
In a licensing agreement, a third party is allowed access to the brand’s trademarks. And to use those trademarks, the licensee pays the brand an agreed-upon fee. Compared to a franchisee, a licensee has more autonomy over their business.
So to summarize, franchises are mostly used for service-based businesses and licenses are more suited for product-based businesses.
Now that we’ve covered the basics let’s get into the whys and the how’s.
Why Are American Brands Successful Than Others?
Let’s take a look at some of the qualities international businesses and franchises have:
Communication
In the entrepreneurial world, Proper communication is the lifeline that saves your business.
US entrepreneurs can communicate in business situations with certainty, knowing they are getting their point across accurately.
Risk Culture
Risk-taking is deeply embedded in American culture. While playing it safe might sound like the easier option, you need to remember that change always brings discomfort. Companies with a high tolerance for uncertainty are better at dealing with consequences and making difficult decisions.
Strong In-House Presence
American brands have the advantage of starting from a strong base with a large GDP, and an addressable audience with similar buying patterns. This allows them to develop a strong in-house presence before expanding to an international market.
What Indian Franchises Overseas do?
Let’s take a look at how Indian franchises perform overseas in comparison.
Adaptability
When some Indian businesses with strong in-house audiences try to expand overseas, they often fail. Or they aren’t as successful. Why a lot of Indian brands fail to is, they try to adapt to the local market of the country or region they’re expanding to. Strictly sticking to one strategy or one way of doing things often doesn’t work if you’re looking to win over a diverse market.
Novelty
Most Indian franchises, when they expand to overseas locations, their products are mostly viewed as novelties. This goes back to the adaptability problem. Relying on authenticity might win over a niche audience, but if you’re looking to win over the masses. You need to cater to them.
Risk Averse
Indians have a pervasive culture of, “What will others think?” Which will eventually affect the way you run your business. This mentality can be detrimental to both your personal life and professional life. It prevents you from making hard decisions or taking risks even when they are necessary for your business to grow.
How Can We Solve These Issues?
Working With the Local Market
Might seem obvious but you’d be surprised at how a lot of brands don’t do enough market research when expanding to a new territory. Working with local franchisees and local business owners can be a huge advantage for your brand. They will be able to provide a lot of insight into the local audience’s spending habits, local trends, and local tastes and customs. Employing local counsel can also prevent you from stumbling into legal hiccups, which can severely impact your brand’s image.
Building Robust yet Flexible Businesses and Franchises
Most international franchises do well in the Indian market because they have models that are robust and flexible. Developed markets have better ways to support their infrastructure and they invest more money into branding and advertising to develop their image and brand name.
Indian businesses and franchises need to invest more into having the infrastructure to support all their real estate, banking, and supply-chain requirements.
Working with Master Franchisors
This can also tie into working with the local market. Sometimes, employing a master franchisor – a well-funded, local individual. Who works directly with the international parent company to set up and run sub-franchises within the region is a good approach. This strategy can have wide-reaching implications for your business and can overall improve your business growth.
In Conclusion
While international businesses and franchises may have more success in franchising within the Indian market. Let’s not forget that the Indian franchise market is still growing at a rapid pace each year. There is always room for improvement, and more in-house brands and companies are stepping up to the challenge.
If you’re interested in starting your franchise, visit sparkle★minds and sign up.
Are you an entrepreneur or a business owner looking to expand your business into a franchise, and looking to attract new franchisees? Well, now is the right time. 2023 is a potential year for investors and entrepreneurs looking to start a new franchise business in India. A recent survey shows that more than 67.9% of entrepreneurs believe that now is the opportune time to start a business in India. But, the question arises in the mind of every business owner, how do you market your franchise to attract potential franchisees in India? Don’t worry. sparkle★minds is going to guide you through this article, giving you 5 proven franchise development marketing strategies in India, which you can implement today to start attracting your ideal franchisees.
5 Proven Franchise Development Marketing Strategies in India
What is Franchise Development Marketing in India?
FDM or franchise development marketing is a marketing activity that a franchisor, uses to sell more business locations to potential franchisees. In addition, franchise development aims to expand the franchise into new territories or untapped markets. Using the help of the inbound marketing team, or a franchise marketing agency, it is possible to incorporate several different traditional and digital marketing strategies to attract prospects.
Investing in the development process will give you the experience to maximize franchise growth, which in turn will lead to authority, more franchise sales, and as a result, give more profits than ever before.
How to attract potential franchisees in India?
Here are the 5 top marketing methods in India which will help you attract potential franchisees from across the country.
Establish Your Brand as an Authority
Making your brand the best in its industry will help you build a strong reputation with potential consumers and franchisees for your business. Furthermore, because every franchise investor wants to buy a well-known brand, they will be far more likely to choose your brand over those of your competitors.
Hosting and participating in events and webinars where you deliver speeches to share your professional knowledge will help you build your brand as an authority. Potential customers will develop a positive perception of your brand because of this.
Community Marketing
Community marketing, also known as local marketing, helps target prospective franchisees located in a specific geographical location. There are several different platforms or methods, like social media marketing, community events, sponsorships, and print advertising, which can attract people living in those communities.
The best part about community marketing is that you can get to choose locations where you want to focus. This means, if there is a particular area where you want to move into, all you need to do is target that area with campaigns and these proven methods specifically suited to that set of people.
Be sure to mention the benefits of becoming a franchisee owner, while doing this kind of marketing, so it grabs the attention of potential investors. You can use an example of stating the income potential of your brand, which will motivate most entrepreneurs as that is what entrepreneurs expect usually when buying a business in India.
Other motivators could include.
Being your boss
Income potential – returns on investment
Lifestyle rewards
Side business to supplement income
Get rid of a monotonous corporate job
Optimize Your Web Presence / Website
The use of SEO (search engine optimization) is a process for optimizing your website’s content, technical configuration, as well as link popularity so that you can rank higher on search engines like Google. It becomes easier for ideal customers to find your products or services related to your business once you optimize your presence on the website.
Furthermore, by using the appropriate keywords to optimize your web pages, you might draw customers looking to open franchise businesses in your sector. You can achieve this through link building on and off your site, as well as content marketing initiatives (like blogging).
You may optimize your website for lead generation in addition to SEO so that it is prepared to turn potential franchisees into prospects as soon as they land on your site. You may accomplish this by including compelling writing, gorgeous design, and powerful calls to action on your website.
Once you have these prospects’ contact information, you may use a variety of digital marketing strategies to directly sell to them, including direct mail, retargeting campaigns, and more.
Use Current Franchisees as advocates
Another extremely powerful and effective tool for obtaining new franchisees is advocate marketing. This is a process that refers to turning your most enthusiastic clients or franchisees, into your brand advocates. This can be achieved by building a strong relationship with your franchisees, making them feel that they are most invaluable to your business.
At the end of the day, word of mouth will work well, if your current franchisees are happy to be a part of your brand and will be inclined to tell others about it. Along with brand awareness in the business community, this will help you obtain new franchise owners and make them see your brand as a great investment opportunity.
Use Websites that offer Franchise Opportunities
The use of unbiased websites like franchise directory websites provides aspiring franchisees with all the information they need regarding different franchise brands, opportunities, and industry analysis. Furthermore, franchisees can compare different franchise brands and apply to opportunities using these websites.
The use of these directories can be more effective since they target people who already want to become franchise owners. Another benefit of these sites is that they are already conducting their marketing campaigns to attract potential investors. It may be a little difficult to make your presence reach the right audience without the use of such sites because most people rely on these sites when looking to buy a business.
So, are you ready to attract potential franchisees?
Now that you have understood the ins and outs of franchise development marketing, you can go ahead and implement these methods. If you are looking for any business-related opportunities to franchise your business in India, sparkle★minds consultants are trained to take your search in the right direction.
This article will lead you in learning about the creation of a franchise agreement in India and what to look for in one. Do you want to own a franchise in India, first and foremost? If the answer is yes, you should know roughly what to anticipate in a franchise agreement before establishing your business. You won’t be able to run the franchise without any glitches or hurdles at all until you know what to anticipate from an Indian franchise agreement or contract.
How to draft an Indian Franchise Agreement?
To create a strong franchise agreement, you must hire a lawyer. A solid franchise agreement also serves as a safeguard for the franchisor and the franchisee and establishes the groundwork for the success of the franchise. The franchise agreement is one of the most crucial legal documents when it comes to franchising in India because it formally establishes the partnership between the franchisor and the franchisee. In the absence of this agreement, many business-related risks, hiccups, or system breaches could occur accidentally or on purpose by all parties, harming the brand’s reputation. In short, the franchise agreement describes and defines the franchise relationship, outlining the duties and responsibilities that are set forth by both the franchisor and the franchisee.
Who Writes the Franchise Agreement?
Although the franchisor prepares the franchise agreement, the franchisee is also permitted to review the terms before signing. As a result, the franchisee must carefully study the agreement and comprehend the entirety of the contract. They should also obtain guidance from a reliable lawyer during the verification process to gain peace of mind. But if a change is necessary, the franchisee must seek permission from the franchisor. The partnership will be officially established once all the agreements have been agreed upon by both parties.
How long does it take to write a Franchise Agreement?
There are two stages to creating a franchise agreement: ideation and preparation, followed by planning and actual writing. The initial effort begins with figuring out the costs and writing the specifics of the contract, such as the terms, renewal conditions, and transfer of ownership. Consider both parties’ preferences while choosing these dates. Data and figures in the franchise agreement should be carefully considered benefiting the franchisor.
A franchisor shouldn’t think about charging a reduced cost of 2% to distinguish his brand and make it more marketable when it comes to settling the royalties in the franchise agreement. The fees and percentages are necessary to adequately cover the costs and services such as store opening, staff salaries, store visits, and more, therefore franchisors should take this into account if other businesses are charging a 3% royalty.
The preparation of the franchise agreement typically takes up to a month, giving the lawyer time to thoroughly review all the specifics before the deal is signed. Although the franchisor may have a lawyer represent them throughout the entire process, it is also advisable to consult a franchise expert or a specialist in this area. Sparkle minds can aid and support you in this situation.
What should be included in the Franchise Agreement?
Different types of businesses can add more information based on the nature and demands of the firm, however, it often contains the fees and payment structure, duration and renewal terms, training, and transfer of ownership. Overall, the information provided in the document should have value to both parties and should be carefully examined before being signed. Once all the facts are known, the relationship between the franchisor and franchisee will function effectively, and both parties will be satisfied, as this is an efficient way to ensure a solid legal contract and a long-term association.
Fundamentals in Franchise Agreement
10 introductory provisions to include in all franchise agreements.
Location Site / Region
The franchise agreement should mention the area in which your business will be functioning, along with defining the company’s exclusive rights.
Operations
This is a section in the contract which will explain how the concerned franchisee will run and operate the business.
Training Support
Generally, most franchisors offer training followed by training plans to the franchisee. Usually, the first training for the franchisee is conducted at the Head office or corporate office and then on-site. Furthermore, the agreement would also highlight managerial as well as methodological support information.
Duration
How long the franchise agreement or contract is valid, will be stated in the franchise agreement.
Franchise Remuneration / Investment
The first initial fees also known as the preliminary franchise fees are mainly charged to the franchisee in advance. This grants the rights to the franchisee to use the brand and the operating system of the franchisor. Such costs will be outlined in the franchise agreement itself.
Royalties / Ongoing Fees
Most franchisors charge ongoing royalty fees, which are mostly a fraction of the entire sales, charged monthly.
Trademark / Signage / Patent Rights
This defines the terms on how the franchisee is allowed to use the trademark or brand signage.
Advertising / Promotion Activities
An advertising contract is part of this legal document which defines what amount would the franchisee needs to pay for advertising or marketing the brand.
Renewal / Termination / Cancellation Policies
All of these would be expressly stated in the agreement, including how the contract would be renewed, the reasons for contract termination, and what would happen if the franchisee decided to terminate the policy. This is a crucial clause that the franchisee must carefully examine. If a dispute is likely to arise, the franchisor may also include an arbitration clause that must be taken into account by the arbitrator before proceeding to court.
Exit Clause / Strategies
Reselling policies vary by franchise. Some let franchisees sell the franchises they want. Other agreements have repurchased or first refusal clauses. These enable franchisors to repurchase franchises at predetermined prices or to compete with offers from interested buyers.
To Conclude,
The steps involved in creating the necessary documents and content buckets for a franchise agreement have been addressed. In addition, we discussed who is qualified to write a franchise agreement and how long it takes to do so. You should thoroughly study the final agreement before signing it if you want to keep this connection going, whether you’re the franchisor or the franchisee. You can get assistance and support from sparkle★minds with the essential paperwork for your venture.
Protecting the real essence of a brand is the key responsibility of a franchise and this can only be done once he designs the right business model as well as standardizes the franchise agreement. Don’t worry we can tell you more about this.
how to protect brand quality in franchise model
Brand, a constructive structure of any business thought, is made up of various elements like logo, graphics, tagline, shapes, colors, etc. Furthermore, this becomes a defined symbol that differentiates a company providing products and services from others. Nevertheless, this plays a vital role in creating a quick and emotional impact on customers’ minds, attracting them to the brand. In short, a franchisor puts in many years of hard work and efforts to make and successfully establish the brand, which can be easily acceptable by a wider consumer base.
Selecting a franchise model for expanding the business, comes with an expectation to grow and strengthen the brand across new and untapped markets. Though local partnerships bring along with them immense benefits to a company’s growth, it also has a risk of brand dilution. Thus, it is the responsibility of every franchisor to guard his brand against the risk of dilution though he wants to leverage it to sell as much as possible. But remember, the strategies used to pursue this end often bring the danger of tampering with the quality of the brand.
What is Brand Dilution?
No business model is perfect. Though this is also known as the weakening of a brand, this can also happen by overuse or because of ill-judged brand expansion, resulting in undue competition or price cutting, in turn, hampering the brand image. Thus, companies need to maintain uniformity throughout all their stores or network, be they company owned or franchised, to maintain the quality of the brand. This can be done, by SOPs (standardizing operating processes), uniformly keeping the store interiors, uniformity in HR or other company policies or not to forget even the accounting and reporting systems. This will thus protect the originality of the brand, which is the primary task of the franchisor.
How does a Franchisor protect his brand’s quality in Franchising?
Difficult to accept, but brand tarnishing is an unfortunate reality of franchised operations. Franchising means where a company expands its network and grows. This growth may sound good for the franchisor, but it also weakens its control over the systems which are in place. There may be instances when you must compromise on the quality of the product or service. This results in a loss of customers and gradual market share. A franchisee owner usually thinks about what he is going to do best to grow his business and, in such times, he may fail to adhere to the systems set in by the franchisor, which will eventually lead to damaging the brand image locally. To put a stop to this tarnishing, it is only the franchisor who can do as much as possible to save the reputation of his brand. And the best solution against brand dilution is the franchise agreement.
A franchise agreement can help franchisors to get over the risk of brand tarnishing. Before recruiting a franchisee, the franchisor must prepare a good quality legal agreement using the guidance of a knowledgeable person who knows both legal as well as commercial aspects of franchising. Using this tool makes it mandatory for the franchisee to operate the franchise strictly under the adherence and system laid out by the franchisor. However, as instructed by the franchisor, the franchisee should advertise and promote the brand. Emphasis on the use of a common brand name, logo, identity, and quality with a regular inspection plan of tours to the franchisee can also be laid out in this agreement.
Uniformity across the Franchise System
By uniformity, we mean using a common name, logo, identity, and color theme. But that’s not all that requires uniformity. The franchisor needs to ensure that the pricing of the products should also remain the same as discussed by the franchisor which would be standard across all the franchisees. When a customer comes to a particular brand franchisee, he expects to obtain the same look n feel, and comfort that he would have experienced at the original outlets. Keeping these aspects in place, would make the customer experience far better and keep them coming back to give you more business.
Key Takeaways
Protecting the brand quality is a step taken usually when you first develop your business. But in the case of a franchise model, it is harder because it is in the hands of the franchisee to keep the integrity of the national brand image at the local level. Thus, right from the time you have finalized your franchisee, it is imperative to reinforce the brand image continually before it becomes too difficult later. Continuous efforts from the franchisor’s end are thus an important point to protect brand dilution. Still confused? Don’t worry, sparkle★minds will help you gain clarity! Connect with us today.
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
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.
They can help bring the right franchisees on board
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!
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
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.
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!
